Apple has already developed a patch for the iOS 4 Mobile Safari exploit revealed by JailbreakMe. The security hole affects all iPhones, whether they are jailbroken or not. Malicious code could possibly take over the iPhone and steal personal information by taking advantage of weaknesses in the PDF display code built into Safari.
Currently, the only known software to take advantage of the exploit is the JailbreakMe 2.0 application, which loads itself into the iPhone via Safari and jailbreaks the device. The procedure has been described as brilliant and also scary by security experts who have been studying the inner workings of the code.