The cat-and-mouse game between Apple and hackers all over the world as to who can keep ultimate control over the iPhone, iPad and iPod touch continues. A group of jailbreakers have issued an exploit for the device called "Spirit", which enables users to take back Apple's sovereignty over their gadget.
It's noteworthy because it defeats the most recent measures put in place by Apple, enabling access to the innards of the 3.1.2, 3.1.3 and 3.2 firmware. Once installed, users get a lot more control over their devices, allowing them to use it as a modem, customise homescreen images, enable multitasking, get access to a range of different applications and other benefits.
However, Apple has warned in the past that jailbreaking can do all kinds of nasty stuff - giving access to your handset to hackers, crashing local cellphone towers and more. More importantly, it'll void your handset's warranty, so it's only for the brave or those whose warranties have already expired.
Spirit only works on iPhones which are running an unmodified firmware, meaning that already-jailbroken devices should be restored to 3.1.2 before being jailbroken. It doesn't unlock your handset to other carriers, either, so you'll be stuck with your current network, and SHSH blobs should be backed up before you muck about too much.
If you're still interested, then ReadWriteWeb has a full tutorial on how to accomplish the hack. Remember, it's totally at your own risk, so don't come crying to us if your handset suddenly becomes an expensive paperweight.