The Library of Congress has declared iPhone jailbreaking and unlocking as legal. New anti-circumvention exceptions has been introduced to the DMCA policies that now legally allow iPhone owners to jailbreak their devices and let them install 3rd party apps (not provided by iTunes Store).
According to the Associated Press, the decision to allow the practice commonly known as “jailbreaking” is one of a handful of new exemptions from a federal law that prohibits the circumvention of technical measures that control access to copyrighted works. Every three years, the Library of Congress authorizes such exemptions to ensure that existing law does not prevent non-infringing use of copyrighted material. Another exemption will allow owners of used cell phones to break access controls on their phones in order to switch wireless carriers.