Your ISP will only get a DMCA notice if you were UPLOADING a cracked version of an app -- which you would be via most current p2p, but the vast majority of App Store piracy is hosted on Rapidshare clones via HTTP.

Hmm, well, this is different I think. Most jailbreakers aren't doing it so that they can violate copyright and use apps without the consent of the rights holder, most jailbreak so that they can install apps from non-approved sources, use the phone on non-approved networks, and gain extra leverage over the device (SSH, etc.).

To me, that just sounds like doing what you want with a device you own, and telling Apple that you appreciate the sentiment but don't need their babysitting.

When you download a movie or a game from an unauthorized source, that's copyright infringement. When you download an exploit that lets you use your phone in the ways you want, that's just downloading an exploit; it doesn't transmit any substantial intellectual property owned by any other party, so I don't understand your complaint or comparison, really.

The one provision which jailbreaking may violate is the DMCA's restriction on circumvention of "copy protection". Technically, sharing any mechanism to circumvent "copy protection" is illegal in the United States. I don't think that jailbreaking qualifies as a circumvention of copy protection on balance, though, because most people aren't doing it to make copies, but of course that depends on the judge.

Do we actually have any statistics on what 'most people' are jailbreaking their iPhones for, or is this just guesswork? I am quite prepares to believe that most of the hackers who actually create the jailbreaks are doing so for ideological reasons, or for technical satisfaction, but what about all the people who just install the jailbreaks?

I jailbroke my iPod Touch in order to disable the auto-rotation "feature". I've never installed a cracked app.