The method employed for iPhone OS 3.2 utilizes a port of ‘Spirit’ which roots iPhone OS 3.1.3 by exploiting a vulnerability found in Mobile Safari. To perform the jailbreak on any device running the latest version of iPhone OS, a user must use Mobile Safari to visit a website hosting the exploit and grant permission for the jailbreak. Incidentally, you’re right to think this all sounds familiar – Mobile Safari has been the vector for previous jailbreak hacks.
While there isn’t a jailbreak utility ready for the masses yet, history tells us the iPhone dev community is hard at work putting one together for public consumption. Of course, history also tells us that Apple will be pushing just as hard to address this vulnerability in their next firmware iteration. In other words, don’t count on this jailbreak working for long.