Code that will unlock and "jailbreak" the iPhone 3G and early versions of the iPod Touch is available now on the Internet from a group of hackers known among the iPhone OS community for releasing such applications.

In a recent post at its blog, the so-called iPhone Dev Team writes that, "redsn0w is an easy to use, multi-platform, multi-device jailbreaking and unlocking (iPhone 2G only) tool for the iPhone 2G (original iPhone), the iPhone 3G (but not the 3GS) and also the iPod touch (first and second generation). Currently it is available for Windows and Mac OS X."

Jailbreaking is the use of unsanctioned apps to allow iPhones, or other devices, to run applications from sources other than those approved by Apple (NASDAQ: AAPL), while unlocking a phone means the handset can be used on any wireless carrier, as opposed to just AT&T, the exclusive carrier for the iPhone.

The newly-released jailbreak and unlocking app comes at a time when Capitol Hill is asking the FCC to investigate exclusive carrier deals with handset makers and as Apple continually makes headlines over what types of content is authorized for sale at its App Store.

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