SHAtter is the new bootrom exploit discovered by pod2g of the Chronic Dev Team that allows the use of unsigned code execution. It is being used by the iPhone hacking community to create tools to jailbreak existing iDevices for life.
They had this to say in a blog post:
[…] we’ve put @pod2g’s exploit into a beta version of PwnageTool to test the waters. The SHAtter exploit was enough to convince the iPod touch 4G to restore to our custom IPSW. The successful result is shown below! It’s all working: customized Preferences to show battery percentage, Cydia, root shell…the works!
You can also checkout the video of a jailbroken iPod Touch 4G using SHAtter:
iPhone Dev Team has also clarified that we should expect a new tool (possibly from the Chronic Dev Team), which uses SHAtter to jailbreak iPhone, iPad and iPod Touch as it might be a lot easier. The PwnageTool will be useful only for iPhone users who want to preserve their baseband from getting upgraded so that they can unlock their iPhone using Ultrasn0w.
Although PwnageTool was a useful first test of a full iPod 4G jailbreak via SHAtter, it’s really overkill compared to the faster tools being developed. Its main use in PwnageTool will be for those with iPhone4’s, to allow updates while preserving the baseband and ultrasn0w carrier unlock. In any event, this is another exciting time for iPhone and iPod touch users…the cat and mouse game continues!
Dev Team or the Chronic Dev Team haven’t provided an ETA on when the tools to jailbreak iOS 4.1 will be released but they're working hard to release the tools as soon as possible so please be patient.Dev Team’s blog]