Thanks to Zottd, iPhone users can now port the popular VLC media player to their iPhone or iPod touch, making it possible to drag, drop and play MPEG/MPG, AVI and MP3 media formats. He is also in the process of researching playback for VCD, DivX, WMA, and WMV, and he notes that FLAC and OGG are coming soon. The project is currently in beta, but a public release is on its way. Naturally, you will need a jailbroken phone to take part in this awesomeness. [zottd via Macrumors]
@kmerenda: "Is is safe for me the jailbreak my phone? Is there an easy way to restore it for the next iPhone firmware upgrade?"
Yes, it's very safe to jailbreak your iPhone or iPod touch. Go to [ziphone.org] and download Ziphone for either Mac or PC.
To restore your iPhone or iPod touch, hold down the Power and Home buttons on the device until the Apple logo appears on the screen, at which point you can let go of the Power button— but keep holding the Home button. When you see the "Connect to iTunes" logo appear, you may let go of the Home button, connect your device to your computer, and use iTunes to restore.