The EFF reports:
Apple’s iPhone, now the best-selling cellular phone in the U.S., has been designed with restrictions that prevent owners from running applications obtained from sources other than Apple’s own iTunes App Store. “Jailbreaking” is the term used for removing these restrictions, thereby liberating your phone from Apple’s software “jail.
Apple takes the position that this is a violation of the Digital Millennium Copyright Act. The EFF disagrees. Personally, I agree with the EFF, but I found a better alternative to jailbreaking my iPhone. I returned the piece of crap and got a Blackberry.