What are the benefits of iPhone jailbreak?
Solution 1:
I jailbroke my iPhone 4 few weeks ago, specifically for the MyFi, which allows you to tether your 3G connection to your other WiFi-enabled devices (iPad, laptop, etc), without paying $20 to AT&T every month and being limited by 2Gb of data. MyFi is $19.99, but you pay it once and enjoy free tethering after that, especially if you kept your $30 unlimited data plan (I did). Initially beyond that I saw very little reason to use other apps from Cydia store, but now I slowly changing my mind, since I found few real gems.
SBSettings - gives you quick panel to toggle WiFi, Bluetooth, 3G and few other functions. This is extremely handy, especially when you're trying to preserve your battery (long day on the conference or something) and you don't want to dive into Settings each time you want to turn WiFi on or off. SBSettings is free
Notified Pro - this is notification management done right. Notifications have horrible usability in iOS and this app ($4.00 for Pro version, but I think they have the light one for free as well) fixes it by introducing notifications list similar to one Android has, which you can activate from status bar or via other customized shortcuts
Frash - which is Flash for iPhone, right in your mobile Safari. Frankly I haven't use it for anything serious yet (and it doesn't support my favorite Flash game Quadradius), but it's a good app to wow your friends, since everyone knows that there's no Flash on the iPhone and you can always prove people wrong.
My favorite app IntelliScreen - it's a paid app as well, but it's extremely handy. It gives you a highly customizable lock screen very similar to Windows Mobile's Today screen, so you can look at your calendar, emails, SMS and other info without even unlocking your phone. Really, really handy.
One other thing that I didn't try personally yet, but going to soon is sync with your PC or Mac over WiFi. I hate to do it over a cable.
Now, on the bad side:
You have to be more careful and knowledgeable about stuff you're installing. That includes both apps (which are, in general, more buggy and may conflict with each other or with iOS) and stuff like official Apple iOS updates that you can't install unless you know that there's a jailbreak for them.
Cydia store (and others like RockYou app store) are less informative than AppStore and quite often it's hard to figure out what certain app does
Payment (while they allow multiple ways including AMazon payments and PayPal) is usually much more painful
Apps quite often are more expensive (think $4.99-$9.99 range), but on the bright side they worth it
Solution 2:
I Jailbroke my iPhone 4 as soon as the jalibreak was released and had my iPhone 2G Jailbroken before that.
For me it's not about illegally installing applications, it's about intsall tweaks and applications which Apple can't or won't allow into their App Store, for example:
Winterboard: Complete themeing system.
SBSettings: Easily enable/disable settings from within any application.
Infinifolder: Remove the 12 Application limit from iOS4 Folders.
QuickReply SMS: Reply to SMS messages directly from the message alert with a popup keyboard and then instantly return back to what you were doing.
Cyntact: Show contact pictures in Contacts.
BossPaper: Rotating wallpapers (Was available before iOS 4 allowed them)
Categories: Allowed Apps in folders years before iOS4 did!
The few short weeks I had my iPhone 4 without it being Jailbroken I found it hard to use as I'd got so used to the small tweaks I'd installed my Cydia, most of them I had purchased.-
Solution 3:
As to your first inquiry, Jailbreaking was illegal because of the way the Digital Millenium Copyright Act restricts the circumvention of encryption, copy protection, and other digital security mechanisms. In short, it is not so much the possession of a jailbroken phone which was illegal, but rather the process by which the phone was jailbroken. A common analogy is to liken the DMCA's restriction to a law preventing the crossing of red lines in the road. If there is a public park on the other side of the red line, it is legal for you to be there, but illegal to walk across the line to get there. The recent LoC ruling essentially created an exception to the DMCA's restriction for the specific purpose of jailbreaking a phone for the purpose of installing additional software and expanding it's functionality.
Now, as to Why Jailbreak? In short, Jailbreak if there is an application you want to run which requires you to jailbreak. Apps available through Cydia and other repositories available to Jailbroken iPhone owners run the gamut from those rejected by Apple because they violate the App Stores Terms of Service in some way (Explicit content, use of hidden or illegal API's), apps from authors who disagree with Apples policies in administering the App Store, and apps which rely on functionality only available from other jailbreak apps.