You just can't keep a determined group down.

The guys over at the iPhone/iTouch Dev Team have announced that they've been hard at work since the 1.1.1 update for the iPhone and have made progress towards an unlocking tool for the newest version of the handset's firmware.

According to The Unofficial Apple Weblog, the early version of the jailbreak tool allows for the following:
-"Third Party apps run. Kind of. We probably have to recompile many of them for the new frameworks because many of them crash.
-Springboard no longer recognizes DisplayOrder.plist. And the list of "whitelisted" apps (that is, the official Applications including Safari, Photos, Calendar, etc) seems to be hard-coded into Springboard.app.
-The iPhone has been activated via third-party workarounds.
-The 1.1.1 binaries barely work with 1.0.2 -- at least not well enough to run the music store without major hacking.
-The Mobile Terminal App works on 1.1.1.
-The entire bsd suite still works -- as do standard command-line utilities compiled for ARM.
-1.1.1 references both com.apple.mobile.radio and com.apple.mobile.nike.

At this point, the new methods are pretty technical and "nowhere near ready for prime time", but for fans of unlocked iPhones and third party applications, this may be the best way to get what they want out of the phone without having to downgrade the firmware in the process.

Let us know what you think over in the comments or forums.