I’m pretty sure they’ve done it.  You guys have been waiting for it and they’ve done it.  As you can see from their original post at iphone-dev blog, this is the “riddle” as we like to call it:

Thermonuclear pop!

* Well it isn’t a British Thermonuclear Device.
* It isn’t an episode from “The Twilight Zone”
* And it certainly isn’t iPhone 3G related (right now)
* There is one other device…
* It fits in your pocket..
* What can it be?

iPod Touch 2G jailbreak. Coming to a software suite near you.