Ziphone creator Piergiorgio Zambrini has discovered a bug with the iPhone that causes the phone to crash when it starts to play a specially-created video. Forbes.com recorded a demonstration.
The bug apparently affects the audio track of the video, which takes down the iPhone operating system. I could not independently verify the bug, because the links to the movie (and the movie file itself) shown to Forbes were no longer available online.
The bug does not permanently damage devices, according to Zambrini. He said he hasn't yet contacted Apple's security response team. Forbes.com informed an Apple spokesman about the flaw and is still awaiting an official comment.
Zambrini claims he emailed Steve Jobs personally about the bug; around the same time, he applied for employment at Apple. Apple has not yet responded to his resume. It strikes me that Zambrini is trying to appeal to Apple in the same way that your ex-girlfriend tries to appeal to you by spray painting the front of your house.
In the Forbes.com article, Zambrini now claims his goal "...is not to work for Apple."
Zambrini created Ziphone, a popular iPhone unlocking tool.
Update: A tipster sends word that he's been in touch with Apple's Product Security Team, and says the crash has been fixed as of iPhone OS 2.1. There is no threat to users as long as your iPhone software is up-to-date.