Pre-release builds of iPhone OS 2.0 are capable of recognizing YouTube content embedded in Web pages, allowing the user to click through and view video in the dedicated YouTube application. The feature works in a fashion similar to that of the bookmarklet iTransmogrify. Only YouTube content that has been encoded in the H.264 format, required for playback on the iPhone, is viewable via this method. The embedded YouTube functionality is brought about by the addition of a YouTube plug-in for MobileSafari included with iPhone OS 2.0. The plug-in could be a harbinger of other MobileSafari plug-ins from Apple or other third-parties.

Apple has added a contact search function to the new build of iPhone OS 2.0, 5A240d. The search function is also included with the revised iPhone Simulator that comes with the iPhone SDK build 9M2158a, beta 3. The search works much like iTunes search — a live-refining list of result.

Apple has now released iPhone OS 2.0 build 5A240d to authorized developers, eliminating an issue in which devices running the previous, expired OS build 5A225c were rendered non-functional. We’re still awaiting word on specific enhancements in this release.

Pwnage, released earlier this week by the iPhone Dev team for Mac OS X (Windows edition coming soon), is an amazing piece of work. The tool exploits a low-level vulnerability in the iPhone’s boot process to allow the installation of custom OS files. The potential ramifications are huge: pwnage could embody a future-proof method for unlocking and activating iPhones, immune from Apple’s countermeasures. The most relevant advancement realized via Pwnage thus far is the ability bypass installation roadblocks instated by Apple. This has allowed users to install pre-release versions of the iPhone OS, such as OS 2.0, which normally requires expressed authorization and a special signature from Apple. With a pre-release copy of iPhone OS 2.0 leaked to various file-sharing repositories, many users have made the premature leap. Before we tell you how to install iPhone OS 2.0 using pwnage, here are a few reasons you absolutely shouldn’t:

• downloading and possessing a leaked copy of iPhone OS 2.0 violates Apple’s license agreement, meaning you are essentially using pirated software
• iPhone OS 2.0 is, based on reports, highly unstable and a very slow performer in its current state
• most unofficial third-party applications exhibit compatibility issues with iPhone OS 2.0
• your iPhone must be unlocked to properly function with the custom firmware — a process that will technically void your warranty

Installing iPhone OS 2.0 pre-release on an iPhone running OS 1.1.4 requires the following steps:

1. Unlock and activate the iPhone using a tool like ZiPhone.
2. Download Pwnage
3. Quit iTunes
4. Put your iPhone in recovery mode as follows: press and hold the sleep/wake and home buttons simultaneously for about 20-30 seconds, until you see a yellow triangle with an exclamation point in the middle accompanied by the text “Please Connect to iTunes.” or a picture of the iTunes icon with a USB cable pointing toward it.
5. Launch Pwnage, and click “Browse .ipsw.” Select the iPhone OS 1.1.4 IPSW file, located in ~/Library/iTunes/iPhone Software Updates under Mac OS X or C:/documents and settings/[yourusername]/Application Data/Apple Computer/iTunes/iPhone Software Updates under Windows XP or available for download here.
6. Once the IPSW is recognized, click the button “iPwner.” Wait for the prompt to connect your iPhone, then do so.
7. A series of text will scroll by on the iPhone screen, and the device should reboot with a pineapple logo instead of the traditional Apple logo. The device is now “pwned”
8. Click the “OK” button in Pwnage, then again click “Browse .ipsw.” This time select the new OS file you would like to upload (such as iPhone OS 2.0 pre-release).
9. Once the IPSW file is recognized, click the button “IPSW Builder.” This will create a custom version of the file you selected in the last step, with necessary authorization bypasses.
10. Quit Pwnage.
11. Launch iTunes, and with your iPhone connected, hold down the option key (under Mac OS X) or shift key (under Windows) and click the “Restore” button.
12. Locate the custom firmware file you created with Pwnage and select it. The restore process should complete normally. If you receive a 1602 error, try restoring again.

If you experience issues during the process or decide to get any custom firmware off your iPhone, simply do a normal iPhone restore in iTunes.

While the pre-release build of iPhone OS 2.0, officially available only to select developers and beta testers, is sluggish and buggy overall, one area of operation has seen a dramatic performance boost. The new version of Safari included with iPhone OS 2.0 is up to 35 percent faster at executing JavaScript than previous editions of the iPhone OS. Prior testing of iPhone OS 1.x’s JavaScript performance using Celtic Kane’s benchmarks revealed performance 30 times slower than that of a 1.83 GHz MacBook Pro, with iPhone-generated test times in excess of 9000 ms on average. Under iPhone OS 2.0, however, Celtic Kane’s benchmarks run the gamut in just over 6000 ms. The iPhone OS 2.0 beta uses an updated version of WebKit — build 525.15 — to render pages in Safari.