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.

A pre-release build of iPhone OS 2.0, currently in the hands of select developers and beta testers, includes a new live location tracking feature that will automatically track the user’s current location in the Maps application on a persistently updating basis. So, for instance, driving down Broadway in New York with an iPhone would result in a constantly moving blue, pulsing ball indicating your current location. This makes the iPhone’s “Locate Me” function feel much more like a real GPS. At this point the function (along with the entirety of iPhone OS 2.0) is somewhat flaky and slow, but promising.

Being a new device, there is bound to be some minor bugs in the software. Just because its and Apple product doesn't meant that its perfect. AppleHound.com has released a list of reproducible bugs on the iPhone OS. I have verified a few of these myself. Try it out, it can be fun. I'm sure Apple is working hard to patch most of these problems for the next OS update.