An article in Wired News today warns of a potential security hazard in the iPhone:

...every application on the device—from the calculator on up—runs as “root,” i.e., with full system privileges. As a result, a serious vulnerability in any of these applications would allow hackers to gain complete control of the device.

While there are no published exploits for this vulnerability yet, and it is unlikely any will show up soon, security experts are warning that it may be only a matter of time, and any attacks that take advantage of this could have dire consequences:

With the limited bandwidth of the iPhone, malicious code would be unlikely to slow portions of the internet. But malware could wreak creative havoc of a different kind. It might, for example, cause a phone to call numbers without the user’s knowledge, seize text messages and a list of received and sent calls, turn the phone into a listening device, track the user’s location through nearby WiFi access points, or instruct the phone to snap photos of the user’s surroundings—including any companions who may be in view of the camera lens.

Apple plans to release an SDK to allow third parties to develop applications for the iPhone, but said it was working on ways to maintain the device’s security while doing so.