How close are we to getting third-party applications on the iPhone?
Programs ... we're close. Applications involve a good understanding of the framework. I am personally not a Mac coder, so I don't understand everything involved. But I'd bet its done within two weeks.
Does having access to the bootloader get us any closer to allowing the iPhone to work on a non-AT&T network?
Only if we find a way around the permission denied errors.
Are you worried at all that Apple may pursue you for hacking their product? How about DMCA violations?
A law was passed last November to allow the unlocking of cell phones. So on that front we are fine. We have been careful not to post online any dumps of firmware and haven't made any modifications to the MobileDevice framework/dll, so no copyrights have been violated.
What's the latest progress on unlocking the iPhone?
We basically have full filesystem access. I'd really like to get ssh or something similar running. The main thing standing in our way now is the Mach-O ARM toolchain.