Cast aside all doubts: the iPhone Dev Team have released a video demonstrating them unlocking and Jailbreaking the iPhone 2.0 firmware with their new PwnageTool 2.0. 

"We’ve added lots of new features, including 2.0 support, spotlight file indexing of .ipsws, canned websearches, installer custom configuration, custom root partitions and various other things that you’ll see on the release" iPhone Dev Team

So far the tool itself is yet to be released.  The Team are saying it'll be "soon", although not this weekend, and that the wording in the video should be pretty much ignored since it's mainly just placeholder text.

Some have questioned the need for Pwnage now that Apple have released the App Store and made the iPhone available in many more countries.  The increased tweaking tools, such as predefined websearches and custom root partitions, are obviously a move by the Team to keep the tool relevant.  True, casual users probably won't need to use it, but those looking to get the most out of Apple's "21st Century Newton" should start biting their nails in anticipation now.

[via Engadget]