UPDATE: We now have complete instructions for the official dev team jailbreak, which does not disable Nikita (Apple's application signing system).-----
You might want to think twice about applying the current iPhone 1.1.3 jailbreak "soft-update" (Mac or Windows) that was released (but not solely developed) by "Nate True." We've received word that the method may prevent installation of official third-party applications that will be created by the forthcoming iPhone SDK (software development kit) from Apple. The reason: this jailbreak method breaks "Nikita," a component that is responsible for installing signed software. It appears that the current process is reversible, but almost certainly won't be able to co-exist with official third-party apps.
iPhone software/firmware 1.1.3 includes a mechanism for approving signed applications. Signed apps use private keys to authorize themselves for installation on the iPhone/iPod Touch. The first group of applications to use this mechanism is the $20 iPod Touch application (Mail, Notes, etc.) upgrade available for purchase through iTunes.
Reputed iPhone developer Jonathan Zdziarski told iPhone Atlas:
"It looks like Nate's update causes Nikita to break (Nikita is the component on the iPhone/iTouch responsible for installing signed software, such as the iPod App Pack and likely SDK apps in the future)," adding "We believe this is because the soft-update method that was released doesn't update the kernel cache, so users are likely still booting into the 111 or 112 kernel, which is lacking the necessary DRM components to verify/decrypt packages with Nikita."
Zdziarski says the method originally devised by the iPhone dev team (which is still secret) does not suffer from this problem. As previously reported, however, the dev team does not want to release this update until after the official SDK release.
"In the meantime, we're working on an SDK-functional soft-update. If we succeed, we'll release it as soon as it's ready. If not, we'll release the current soft-upgrade method we're using (with no SDK support), and release our "secret" method at SDK time, to let people use it." said Zdziarski.
In the view of some unofficial iPhone development team members, the jailbreak method released by Nate True is tantamount to software piracy or copyright infringement and should be avoided.