In the words of the sainted Professor Farnsworth: "Good news,
everybody everyone!" The iPhone/iPod touch dev team has decrypted the iPhone 1.1.1 and iPod touch ramdisks. So what does this mean, loyal TUAW readers? It means that you're getting really close to free, non-commercial 1.1.1 unlocks put together by a cadre of dedicated hackers who are doing all of this for your benefit, for fun in their spare time, and for free.
To all of you cynics who roll your eyes and add "does that mean we're getting really close to free, non-commercial bricks for the next firmware upgrade", the for-pay SIMFree 1.1.1 unlocks are now on sale. For those of you who would rather wait and save the $60-$100, it doesn't look like it will be long.
Update: Yes, they are working on unbricking as well as unlocking, saying they are "dedicated to getting a free and workable solution out to the general public. At the very least, a baseband downgrader should be possible. We understand your frustration, and please don't think for a second that we've forgotten you."
Thanks xorl, mjc, Edgan, netkas, pumpkin, asap18, NerveGas, tE_gU