Information Week reports The iPhone Dev Team broke into the new firmware upgrade that ships with the iPhone SDK
They seem to have decrypted the disk image and jailbroken the firmware, finding a way to run software without an Apple development certificate, says poetic_folly at modmyifone.
An image shows screenshots of apps running on the firmware, which requires a dev certificate to do normally, although none have yet been issued. The jailbreak currently only works with a hacked activation, and it will not work with AT&T iPhone's yet.
Today the IPhone Dev Team shows how to dual boot an iPhone with iPhone 1.1.x Dual Boot / Jailbreak in their latest announcement.