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Geohot was the first known individual to jailbreak / unlock an iPhone, then the DMCA (Digital Millennium Copyright Act) was revised allowing phone modification, which made it legal. On the grounds that since you purchased it, you can do whatever you want. Microsoft has ran into problems like this, because they have the right to "brick" dev consoles because consumers don't legally own them. However, if they were to "brick" JTAGS the lawsuits would fly as Microsoft would be sued for destroying purchased property from a consumer. This is all related roughly to what is going on now.
This case will more than likely decide modding for all consoles. This case could set the precedent for all future modding legal problems. It all comes down to weather you own that piece of hardware you purchased. However, once Sony realizes the weight of this lawsuit they might drop it on a technicality.
Here is an interview with geohot about the whole situation: http://ibotmodz.net/...-of-the-show-r4
For up to date news, watch on geohot's website: http://geohot.com/
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