Opening the weather application every time to check the current weather has always been a big pain. I've always wanted something to display live weather on my home screen, though the Weather Widget did it, it occupied a lot of space on the home screen. But now, there's a utility on Cydia which lets your weather icon show the current weather. Though this can be battery consuming it's worth a try.
First of all, WinterBoard (which you can get from Cydia) is a must to install this tweak. Then, you can simply download this little hack named WeatherIcon from Cydia (in the MMi source) and activate it in the WinterBoard application (make sure you move it above any theme you have enabled on the phone so that it replaces the theme's weather icon).
The best feature of this tweak is that it automatically displays the weather of topmost location in your Weather application location list and even sets the locale to Celsius or Fahrenheit. If you remember back to the Weather Widget you had to set C or F yourself manually.
It comes with a default blue weather icon which replaces the current weather icon but this can be changed to a transparent one (download here) or anything else. For this, you need to have OpenSSH installed on your phone through Cydia and some SSH client like Cyberduck on your Mac or WinSCP on your PC. After that, follow the steps below.
1. Type in your IP address in the SSH client. For this, go to Settings --> Wi-Fi --> Your Network to get the IP Adress.
2. Then in username, fill "root" and in password type "alpine"
3. Then, naviagate to Library/Themes/Weather Icon.theme/Icons/ directory and replace Weather.png with the icon you want.
4. Respring or reboot for the changes to be visible.
The app also has another useful feature, that is, it displays the weather condition along with the temperature. For example, for cloudy weather, a cloud will appear on the icon.
You can get this utility off Cydia from the ModMyi.com source.
P.S. All the credit for development of this tool goes to the developer David Ashman. I have just created the guide.
UPDATE: I just noticed that if you deselect it in WinterBoard but do not remove in Cydia, the stock weather icon will overlay this one until you delete it from cydia.