History of the iPhone Jailbreaking

 The first jailbreaking method was released on June 27, 2007 and made it easy to stay on AT&T and use an iPhone. Consequently, Apple locked their iPhones to the US Carrier AT&T, and a month later the first third-party game was released for the iPhone and iPod Touch. Three months after the initial jailbreak, another method was discovered, which led to a cat and mouse game between Apple and hackers to patch and exploit security holes.
In February 2008 the Italian computer hacker zibri el Fontu found the most important key inside the iPhone which then led to all upcoming jailbreak methods. Zibri himself coded and freely distributed ZiPhone. Upon the nearing release of iOS 2.0 (previously iPhone OS), a hacker group called the iPhone Dev Team released a jailbreaking application named PwnageTool that used a graphical user interface to jailbreak 2G and 3G versions of the iPhone, and the first generation of iPod Touches then available. PwnageTool continues to be developed as of iOS 4.2.1.

In January 2009, the iPhone Dev Team commenced work on jailbreaking the iPod Touch 2G. On March 17, 2009, Apple announced the release of iOS 3.0, which remained unbroken until the iPhone Dev Team released PwnageTool 3.0 and redsn0w 0.7.2 three months later. The iOS 3.1 release in September 2009 again disabled jailbreaking, which was followed by a new version of PwnageTool able to jailbreak all devices except the iPod Touch 3G; the iPod Touch would remain unhacked for a month, until the release of George Hotz's blackra1n.
In February 2010, Apple released iOS 3.1.3, once again blocking jailbreaks. However, most iPhone and iPod Touch models could be downgraded. The iPhone 3GS and iPod Touch 3G were downgradable only if the user had saved the SHSH blob of their device.
In March 2010, Wii homebrew developer Comex released a video demonstrating a preview of an untethered jailbreak Spirit (as opposed to Blackra1n's tethered jailbreak).
In April 2010, George Hotz (Geohot) announced that he was working on a new untethered exploit, limera1n, and registered the domain limera1n.com. However no exploit was released for several months, and Geohot announced his retirement from the jailbreaking scene in July, leading some to speculate that the exploit had been 'hype.'
On May 2, 2010 shortly after the iPad 3G release, Comex's Spirit was released. It worked on all iPod touches, iPhones and iPads running the latest iOS at the time (3.1-3.2), untethered. It functioned similar to Blackra1n, with only a single button to jailbreak.
Apple released iOS 4 on June 21, 2010. Hours later, the iPhone Dev Team released redsn0w, and in the following days updated versions of Pwnage Tool and Snowbreeze were released. These exploits allowed jailbreaking of iOS 4 on the iPhone 3G/S and second generation iPod Touch, but there was initially no working jailbreak available for the iPhone 4.
On July 25, 2010, the Library of Congress ruled that jailbreaking was explicitly exempted from provisions of the Digital Millennium Copyright Act.
Comex's Spirit jailbreak was defeated by an update to the iPad's iOS in July. On August 1, 2010, Comex released the first publicly available jailbreak for the iPhone 4 called JailbreakMe 2.0. The jailbreak was activated by visiting a web page (JailbreakMe.com)^[20] on the device's Safari web browser. The jailbreak is applied onto the iOS device right from within the browser. This type of jailbreak had not been used since iOS firmware 1.1.1 on first gen iDevices. It was able to jailbreak firmware versions 3.1.2 to 4.0.1 on all of the latest iPhone/iPod Touch/iPad models.
Two weeks later Apple released iOS 4.0.2 for the iPhone/iPod Touch and iOS 3.2.2 for the iPad. These upgrades added no new features, but closed the PDF exploit rendering the JailbreakMe.com method useless.
On August 20, 2010, Apple stopped signing firmware for iOS firmware released before 4.0.2 for the iPhone/iPod Touch and iOS 3.2.2 for the iPad. This forced users requiring a firmware restore to upgrade to 4.0.2 firmware, which had patched vulnerabilities allowing jailbreaking. There again followed a period of several weeks in which there was no working jailbreak available for the iPhone 4 running the latest firmware. On September 8, 2010, as soon as Apple released iOS 4.1, the Chronic Dev Team announced they were working on a bootrom vulnerability in the latest iPhone and iPod touch devices. This exploit has been named as SHAtter exploit.^{[citation needed]} The bootrom exploit has been confirmed to work on iPhone 4, iPod Touch 4G, and iPad, which all contain new CPU, S5L8930. The nature of the bootrom level exploit, codenamed SHAtter, means that the devices would be jailbroken for life until Apple makes changes at hardware level. On September 20, 2010, pod2g, the person who discovered the SHAtter exploit announced he would no longer be working with the Chronic Dev Team.
On September 23, 2010, iH8sn0w released sn0wbreeze 2, the first jailbreak available for iOS 4.1. However it was a tethered jailbreak, and only worked on older devices, not the iPhone 4 or iPod Touch 4G.
On October 7, 2010, the Chronic Dev Team announced the release date of the new jailbreak Greenpois0n for the iPod Touch 4G and iPhone 4 running on iOS 4.1, and iPad running on iOS 3.2.2. The jailbreak would be released on 10/10/10 at 10:10:10 a.m. GMT. Greenpois0n was expected to be based on the SHAtter bootrom vulnerability.
However shortly before the planned release of Greenpois0n, GeoHot (George Hotz) came out of retirement with the surprise release of Limera1n, which he had previously announced in April but had never released. The exploit was the first capable of jailbreaking the iPhone 4 running on iOS 4.1 and iPad running 3.2.2, and was based on a second, previously undisclosed bootrom vulnerability.
The Chronic Dev Team subsequently delayed the release of Greenpois0n while they adjusted it to use Geohot's bootrom exploit rather than SHAtter, stating that releasing the original SHAtter-based greenpois0n would be "a complete waste of a perfectly good bootrom hole in light of limera1n, and so it can be held until Apple closes limera1n’s hole." The Greenpois0n jailbreak was eventually released on October 12, 2010, and allows jailbreaking of the iPhone 4, iPhone 3GS, iPod Touch 3G/4G running iOS 4.1, and iPad.
A Mac version of limera1n was released by Geohot on October 14, 2010, providing the first way to jailbreak  4.1 via Mac. On October 16, 2010, Chronic Dev Team has released greenpois0n for Mac OS X. On October 18, 2010, Greenpois0n RC4 was released, adding support for iPod Touch 2G. This makes all iDevices running iOS 4.1 or 3.2.2 (iPad), jailbreakable.
On October 20, 2010, the iPhone Dev Team released PwnageTool 4.1, capable of jailbreaking the iPhone 3G, 3GS, and iPhone 4, iPod touch 3G and 4G, the iPad, and the Apple TV 2nd generation running on 4.1 (for iPad, version 3.2.2).
On November 1, 2010, the iPhone Dev Team released redsn0w 0.9.6b2 to jailbreak the iPhone 3G, iPhone 3GS, iPhone 4,iPod touch 2G, iPod touch 3G, iPod touch 4G, iPad, and the Apple TV running on version 4.1 or 3.2.2 (iPad).
On November 13, 2010 ih8sn0w released sn0wbreeze 2.1 which works on the iPhone 3G, iPhone 3GS, iPhone 4, iPod Touch 2G, iPod Touch 3G, iPod Touch 4G, iPad and Apple TV 2 running on version 4.1 or 3.2.2 (iPad)
On November 22, 2010, redsn0w 0.9.6b3 was released to jaibreak the iPhone 3GS, iPhone 4, iPod Touch 3G, iPod Touch 4G via a tethered jailbreak and iPhone 3G and iPod Touch 2G untethered, all running 4.2.1 firmware. limera1n support was also added, allowing custom packages to be installed along with the jailbreak itself.
On November 28, 2010, PwnageTool v4.1.3 was released. It is capable of jailbreaking all previously jailbreakable models as well as changing the iPhone 3G/S baseband to 6.15.00, the iPad 3G model's baseband from the 3.2.2 firmware. ultrasn0w was also updated to unlock this baseband as well, providing an unlock to any 3G/S users who updated to 4.1 before the baseband preservation feature was implemented.
On November 29, 2010, redsn0w 0.9.6b5 was released. No changes from the previous version were made except it can now flash the 06.15.00 baseband on iPad, iPhone 3G, and iPhone 3GS.
On December 3, 2010, redsn0w 0.9.6b6 was released. It includes hacktivation to activate the iPhone and some bug fixes.
An untethered version of Redsn0w was released on Christmas weekend for Mac testers to jailbreak all Devices on 4.2.1. If the Mac feedback is good the Windows port will be released.
On December 26, 2010, redsn0w 0.9.7b1 was released as a beta test to untether iOS 4.2.1 for Mac users. This is only compatible with the iPhone 4, iPad, and iPod touch 4th generation. The Jailbreak is still in an early beta phase and will disable your Bluetooth and will also stop Skype from working.
On December 27, 2010, redsn0w 0.9.7b2 and 0.9.7b3 were released. Beta 2 fixes all the native app crashes (including Task switcher) and beta3 extends the fix made in beta2 over to the non-GUI programs too (so iTunes embedded videos are now working).
On December 31, 2010, the iPhone Dev-Team released redsn0w 0.9.7b4 to testers.
On January 9, 2011, the iPhone Dev-Team released redsn0w 0.9.7b5 to testers.
On January 10, 2011, the iPhone Dev-Team released redsn0w 0.9.7b6 to testers. It fixed the skype problem. Their next step is to port Monte back to 4.1, and do fixes for speed in the windows version.
On January 21, 2011, the Chronic Dev Team released a video showing an jailbroken iPhone 4 running on iOS 4.2.1 rebooting, which proves the jailbreak is indeed untethered via an updated version of Greenpois0n. However some bugs still need fixing, thus no ETA has been announced yet.