Several sites (TUAW, iPhone Atlas) are reporting that Apple's latest iTunes 7.4 update causes incompatibilities with existing Jailbreak/hacking tools. In some cases causing your iPhone to become non-functional:

...a number of readers have reported that their iPhones have become non-functional (entering an endless rebooting cycle) after the following process: restoring the iPhone using iTunes 7.4, then attempting jailbreak with Installer.app 2.4 or earlier or other older jailbreaking utilities.

AppTapp (Installer.app) developer Nullriver has posted a possible fix for people with the endless rebooting problem. They have also updated AppTapp (Installer.app) to support the latest iTunes.

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