Here it comes, explore the limits of your iPhone by jailbreaking and unlocking it. Firstly, I shall explain the difference between jailbreak and unlock.

JAILBREAK – this allows you to install apps to your iPhone from other sites aside from Apple Store.
UNLOCK – this allows you to use different mobile SIM cards such as Verizon or AT&T aside from the number that came with your iPhone.

Secondly, you should know the difference between a tethered and an untethered jailbreak.

TETHERED JAILBREAK – this means that the jailbreak on your iPhone is undone if you reboot the phone – in other words, you must connect your phone to your PC or Mac to properly boot it.
UNTETHERED JAILBREAK – this is the gold standard, because you don't need to muck about with any of that nonsense.

At the moment, the available jailbreak for iOS 5 is TETHERED. And to jailbreak your iPhone, you will need a tool to modify your iOS 5 on your iPhone.

The latest version is Redsn0w 0.9.9b6 for Mac users. Some Windows users have also reported success with the Sn0wbreeze tool. Prior to that, you will need to upgrade your iTunes to version 10.5, and must download the IPSW file.

Before you start, you should back up your iPhone in iTunes.
Read and understand all the warnings, both here and in the linked articles. Neither I, nor Computerworld are responsible for anything you choose to do with your iPhone – ONLY YOU ARE. 

STOP iTunes to update automatically.
STOP iTunes to automatically update your iPhone (iOS updates will undo jailbreak).
PLUG your iPhone directly into a USB socket on your Mac or PC's case.
UNLUG other USB devices plugged into your Mac or PC.
USE a genuine Apple USB cable.
BE PATIENT. (It usually takes longer than what you think. Wait. 

Redsn0w: Click HERE for the guide to jailbreak your iPhone. 
Sn0wbreeze: Click HERE for the guide to jailbreak your iPhone.

After jailbreaking, you should see an app called CYDIA. Open that and start downloading! ENJOY!

FACT: Jailbreak and Unlock are both legal and it does not encourage or supper app piracy.

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