Late on Tuesday the iPhone hackers on IRC channel -- channel #iphone, server fusion.osx86.hu -- released a new tool called iASign, the full scope of which only becomes clear when you read Erica Sadun's fantastic post over at The Unofficial Apple Weblog. The upshot is this: iASign lets you pay for your phone with a prepaid card (as low as $10), meaning that you no longer have to sign a two-year AT&T contract to use the iPhone.
This does not mean that hackers have unlocked the iPhone from AT&T; you still have to buy an AT&T (or Cingular) prepaid card. But it does save you from long-term lock-in to one company, which you might be interested in if you want to use your iPhone for fewer than two years or you believe that one day the hackers will unlock it and you'll be able to swap it to another carrier.
This option isn't exactly cheap. According to Sadun, who's done thorough tests, text messages cost $0.05 each on your prepaid card, and other data -- i.e., the Web -- ranges from $2 to $10 per MB, depending on the specific pre-paid package. Some features, too, don't seem to work -- YouTube when you're not in Wi-Fi range, and visual voicemail. (When the phone's connected to a Wi-Fi network it works normally.)
Plus, in order to turn it on, you've got to be comfortable with the command line and other techie things -- HackTheiPhone.com has instructions if you use a Mac -- and, as with any hack, you run the risk of ruining your phone. And AT&T or Apple may turn it off at any time. But freedom's never free.