The infamous Jon Lech Johansen, also known as DVD Jon, has posted a method to crack the activation process on the iPhone, bypassing registration with AT&T over iTunes. On his website, "So Sue Me", the Norwegian software engineer famous for his work on reverse engineering data formats, has unveiled a little tool called "Phone Activation Server v1.0" which will unlock the iPhone's iPod and Wi-Fi features.

I've found a way to activate a brand new unactivated iPhone without giving any of your money or personal information to AT&T NSA. The iPhone does not have phone capability, but the iPod and WiFi work. Stay tuned!
Neither phone capabilities nor EDGE functions are enabled with this method, however the device can still work as an iPod, a mail and internet device. Although the activation of the iPhone still does not give you an unlocked iPhone to use with other carriers, looking at the pace that hackers are taking apart the phone's security mechanisms, unlocked iPhones may be available soon.