iPhone 2G (the original), iPod touch (1st and 3rd generation) are not supported, and the iPhone Dev-Team encouraged users to make sure they followed directions for their particular (supported) device, “as there are known upgrade traps and different upgrade scenarios that need to be fully understood and considered before using these tools.”
Jailbreaking one’s iPhone is the process of removing Apple’s controls on the device so that apps outside the App Store can be installed on the device. A jailbroken phone also allows users to modify the OS on the device and otherwise tinker. It is not something supported by Apple, and one uses such tools as PwnageTool at one’s own risk.
iOS 4 was released just two days ago, making this a swift hacking process for the iPhone Dev-Team.