A group of hackers have released a web-based application that JailBreaks iPhones and iPod Touch devices running software version 1.1.1. The application also installs Installer.app. From TUAW:

To use it, open Safari and point your browser to jailbreakme.com (which we aren’t linking to so folks won’t install this by accident, but you are prompted to confirm). Once there, read the directions, scroll to the bottom, and tap Install AppSnapp. If Safari disappears and you return to the main Home screen, you’re good. Just wait a minute more for your unit to restart--don’t touch anything until you see the slide to unlock screen. If Safari hangs, just quit out (press and hold Home for 4-8 seconds) and try again.

Once you get to slide-to-unlock, go ahead and unlock your iPhone or iPod touch. You’ll return to your home screen which will contain a new Installer.app icon.

The application is based on a recently-released exploit for 1.1.1 which used a vulnerability in the open-source libtiff library found on the iPhone.