The iPhone Dev Team released a new jailbreak tool that uses the application processor, and "is impossible to permanently damage your device." Based on a new exploit, no custom firmware building required.
Currently this software is Windows only but support for other platforms should arrive soon. This also requires that your iPhone is already firmware version 2.0.1 but further support should also be added soon. No this IS NOT a 3g unlock. Don't ask.
How to use:
1) Drop an unmodified 2.0.1 IPSW downloaded directly from Apple into the same
folder as the quickpwn.exe binary.
2) Close all other applications, including of course iTunes and iTunes Helper
iPhone 3G.bat if you have an iPhone 3G
iPhone 2G.bat if you have a first-generation iPhone
iPod touch.bat if you have an iPod touch.
3) Follow the on-screen instructions
If you need the 2.0.1 firmware files find them in our downloads.
Edit: poorlad created a quick gui version of QuickPwn. Note: It IS still beta
QuickPwn GUI MMi Member Download | iphone-dev Download
QucikPwn MMi Member Download | iPhone-Dev Download