Within 24 hours of Apple's announcement of the iPhone 4.0 OS beta, a hacker from the iPhone Dev Team who goes by the handle of MuscleNerd announced that he had jailbroken the OS. The process of "jailbreaking" allows users to run apps not authorized by Apple on their phone.

Musclenerd advised that people should avoid installing the pre-release betas on their primary phones, as they are very buggy and can pose security concerns. Since this is a beta, Apple will likely plug up these holes before the official release of the iPhone 4.0 OS.

Source: Apple Insider