Is there anything hackers can't do? Besides get girlfriends and meaningfully contribute to society?
A group of hackers has managed to completely unlock the SIM letting people use non-AT&T carriers like T-Mobile or use the phone outside of the US.
It is 100% legit and the only feature that won't go with an unlocked iPhone appears to be visual voicemail, which is an AT&T specific feature.
YouTube support needs some extra steps to unlock and isn't perfect. It also shouldn't be attempted by someone that isn't familiar with iPhone hacking.
The iPhone can even be restored from iTunes and re-activated on AT&T.
Check out full details and a video over at Engadget. They've unlocked one of their iPhones and report that it works.
http://www.engadget.com/2007/08/24/iphone-unlocked-atandt-loses-iphone-exclusivity-august-24-2007/