The iPhone Dev Team claim to have cracked the software, meaning yet more pressure on Apple in the cat and mouse game between software developers and the owners of a million unlocked iPhones and the company and its network partners.

Apple's unreleased iPhone 2.0 software has already been cracked -- before it even ships, at least that's what a renegade group of developers have claimed.

The developers claim to have decrypted and jailbroken the new iPhone software, and have published a series of screenshots of third party applications running on the device.

The jailbreak currently only works with hacked activation, meaning it won't work with AT&T iPhone's yet.

Apple executives have characterized the buoyant global market in unlocked iPhones as a positive thing, suggesting strong pent-up demand for the product, which is as yet available in just four markets; U.S., U.K., Germany and France.

Source: pcworld.com