Many iPhone users were relieved to hear about the first firmware update to the iPhone, which was published this week. As it corrected several flaws and fixed a security hole, it obviously was welcome with open arms. There were some vague stories about the firmware update causing other issues, though, with modified iPhones.
More information on that is available now, and it seems that the 1.0.1 firmware update may be fairly aggressive in wiping out modifications that have been made to software on the phone by a “third party” (in this case the owner).
At the very least, the update seems to cause a reinstall if it detects modified software, replacing it with a fresh copy. This could be problematic to people who are tinkering with their iPhone, since it could mean a wipe of any changes they've made. However, it doesn't appear that the tools to make these changes have been rendered useless by the update:
Initially, the Apple security update appeared to block the ability to write files on the iPhone using the Jailbreak feature of the iActivation tool developed by the hackers, meaning the tool could no longer be used to add personalized ringtones to the phone.
However, the 1.0 version of Jailbreak continues to work fine, according to an update on iPhone Dev Wiki.
That doesn't mean, however, that a further update won't change that. Apple has expressed their disdain for independent development on the iPhone more than once, and if third-party mods become quite popular they may seek to patch the “workarounds” that let tools like Jailbreak function.