A 17-year-old named George Hotz completely unlocked his iPhone (some soldering was required) and got it running on T-Mobile's network. He's detailed the process on his blog, and also told of trying to sell the phone on eBay, before the auction was shut down.

He wound up trading the unlocked iPhone for a Nissan 350Z and three more 8GB iPhones (for his team members).

Since the news that Hotz had figured out the combination to the popular iPhone, two companies have claimed that they can unlock the iPhone with software only. However, AT&T's legal team contacted one, iPhoneUnlocking.com, which had planned to sell its unlocking software. Now that plan has been put on hold.

The other company, iPhoneSIMFree.com, won't say if it's been contacted by AT&T or not.

There are differences between the three methods, but the big question is: Is this even illegal? Engadget and Ars Technica try to answer, but it seems murky at best for now. Reselling an unlocked phone is most likely a violation of the DMCA, and according to a former FCC commissioner, "All consumers pay a price tomorrow for thievery today."

Another interesting tidbi is that an AT&T exec said that AT&T will happily unlock your iPhone for you — after you've fulfilled your two-year service contract, that is.