Apple iPhone Upgrade Hacks the Hackers

The next time you plug in your iPhone (AAPL), iPhone 3G and iPod Touch, you will be greeted with the suggestion that you upgrade your device to the latest and greatest version of the operating system -- Version 2.0.1.

Before you submit to temptation, you batter make sure you haven't hacked your iPhone/iPod Touch. That's because Apple has decided to hack the hackers by releasing a software update to keep a firm grip on what these devices can -- and can't -- do.

According to the article on InfoWorld.com, Apple this week decided to end the idea that open source developers could hack into -- and change or add programs into -- the latest iPhone and iPod Touch devices.

InfoWorld says that it's all because of a newly developed iPhone 2.0 application called Cydia, which set up an App Store equivalent for open-source developers and those interested in sampling their wares. With Cydia, there's no credit card required, no tracking of who had downloaded what, and no restrictions on the capabilities of applications.

Apple didn't like that. Nor did they like the idea that hackers had been able to permanently unlock first-generation iPhones by using a software program that supposedly Apple couldn't reverse.

So, according to InfoWorld, Apple's new firmware update relocks an iPhone to AT&T (T). InfoWorld says it also breaks iPhone open-source development for their devices.

And CNET News says discussion boards are buzzing about a number of iPhone and iPod Touch users who are encountering what is being called the "White Apple Logo Screen Of Death". Some devices reportedly hang when trying to install or update an application. This happens whether you're running Version 2.0.0 or the new 2.0.1 of the operating system.

According to the report, if you fall victim to this bug, you'll have to perform a complete restore on the iPhone.

Gary Krakow is TheStreet.com's senior technology correspondent.