DinoD7 has published a video of jailbroken iPhone to prove that is is possible to jailbreak iOS 4.1 using the new version of Sn0wbreeze.
It looks like Sn0wbreeze 2.0 will jailbreak iPhone 3G, iPod Touch 2G MC Model, iPhone 3GS with older bootrom and iPhone 3GS and iPod Touch 3rd generation with newer bootrom if it's still on iPhone 3.1.2. You can use F0recast to find out whether your iPhone 3GS has an older or newer bootrom.
iH8sn0w, Dino07, Chronic Dev Team]
Many people in the comments are asking for a progress update. Any kind of update that we could actually give would be too technical for anyone to understand anyway, not to mention potentially reveal the exploit. Just know that things are going swimmingly and we are working as hard as we can. Any demos, screenshots, or *cough* download links will be posted to this blog before anywhere else, so keep an eye out!