If you do opt for the giveaway route, note that and will let you transfer your existing contract--phone and all--to a third party.

With the many improvements that will come with iOS 5, iPhone users now have fewer reasons to jailbreak their phones. Some still remain, though: Having full access to the iPhone's complete file system is attractive to the technically inclined so that they can easily transfer files between their computers and iPhone. With a jailbroken and unlocked iPhone you can use your phone overseas without incurring roaming charges. And clever hacks exist so that with the correct cable you can project the iPhone's entire interface to a TV or projector.

The danger is that not only are you breaking your license agreement, but you're now engaged in the cat-and-mouse game. You jailbreak, Apple releases an update that disables that jailbreak, and you either don't update your phone for the latest features (or, more importantly, security fixes) or update and wait for the jailbreakers to come up with a new way.