iPhone users who downloaded and installed the 1.1.2 update reported that, as expected, the upgrade broke third-party applications and patched a vulnerability which had been previously used to unlock the device.

Even though Apple had not yet offered the 1.1.2 update via iTunes, alert users spotted the 160MB upgrade file on the company's servers and grabbed it. The early consensus as of 10 p.m. Pacific time was that the update disabled third-party applications, broke "jailbreak" applications used to install those unauthorized programs, and fixed the TIFF flaw that had been used for months by hackers to gain the root access they needed to unlock the iPhone so it could make calls on non-AT&T wireless networks.

There was no word whether the new iPhone software "bricks" unlocked phones, as did the last update, 1.1.1, which was released in six weeks ago. The iPhone Dev Team, a group of developers who created the first free unlocking software, had not issued a statement on its Web site or on the Hackint0sh.org message forums as of late Thursday.

One owner of an unlocked iPhone, however, reported odd behavior after upgrading to 1.1.2. "I have activated my iPhones through AT&T after updating to 1.1.2 [and] I can confirm something quite disturbing," said a user identified only as Skinny07 on Hackint0sh. "It detected I was using a TurboSIM [commercial unlock software]. I would get my non-AT&T reception but when I go into the Phone feature it would automatically exit. This would not happen with my AT&T SIM.

"So the Phone application has some kind of extra security check in place [so that] every time you click on it, it will check the legitimacy of the SIM."

Early testers also reported that although the 1.1.2 update added several additional language character sets to the iPhone, it did not, as some had speculated, include new voice memo recording capabilities or a mode that would allow the iPhone to store data as can the much less expensive iPods.

A blow-by-blow account of updating to 1.1.2 on tuac.com cautioned others against rushing into the upgrade. "You probably want to wait a bit to upgrade if you've invested time and effort in customizing your 1.1.1 iPhone," said Erica Sadun.

Apple will start selling iPhones in two new markets -- the U.K. and Germany -- Friday starting at around 6 p.m. local time.

Apple has still not confirmed the iPhone's release in Australia.