July 07, 2010, 2:34 PM — The hacker group known as iPhone Dev-Team apparently is close to unlocking iPhone 4 in order to run unofficial apps and to use other GSM cellular networks besides AT&T.
Unlocking the operating system, usually termed jailbreaking, lets the user further customize the phone and load and run applications apart from Apple's iTunes/App Store Web site. Unlocking the cellular baseband, sometimes called either a carrier unlock or a SIM (Subscriber Identity Module) unlock, means the phone can accept a different SIM card to work on other GSM networks.
Wikipedia has an exhaustive account of iPhone/iOS jailbreaking attempts and tools.
* Allowing Apple's FaceTime video chat to work on 3G cellular connections.* Support for 720p high definition video uploads, not just downloads.* Installing custom wallpapers and themes, changing iPhone icons, and so on, similar to the capabilities in Winterboard (iPhoneHeat.com has a Winterboard tutorial).* And an application to turn the iPhone 4 Wi-Fi adapter into a local hotspot, letting other devices attach to the iPhone and share its 3G connection to the Internet.* Wireless gaming controller to work with the Wii, Xbox 360 or PS3, exploiting the iPhone 4's new gyroscope.
Early on July 5, one of the developers, Planetbeing tweeted (@planetbeing) that he had accessed the baseband bootrom: "The baseband bootrom: c43b30a4ae92571338d93cc42c4050a40dce1e2a. However, @musclenerd and I have run into a speed-bump." A little later MuscleNerd tweeted: "Now that we have iPhone4 baseband bootrom, we can compare it to earlier 3G/3GS bootroms to see if any bug-fixes pop out."
Apple's iOS4 is a major upgrade, including a new baseband, as CNET.com noted. To complete the carrier unlock, the team has to rewrite the baseband code.