biggest draw is 3rd party apps that are not supported by apple. 1 major benefit of these 3rd party apps is they can run in the background. For example, an instant messenger app will continue to recieve messages while your surfing the net. With the apps on appstore, once you exit the program, all processes are terminate. Other apps, such as netshare (used for teathering) were pulled from appstore but similar programs are available from jailbreaked phones. Lastly, you can customize the look of the iphone much more when jailbreaked (change all the icons, start up screens...ect).
A lot of people were worried about the apple killswitch (apple can force uninstall any program from your phone remotely). This can be easily disable after jailbreaking.
when new apple firmwares are released (i,.e. the new 2.0.2), the jailbreak is broken until new new jailbreak is out. This doesn't take long (i think 2.0 was jailbreaked before it was even out since the sdk was released, 2.0.1 took a couple hours or something like that). You may be more vulnerable to viruses, but still very unlikely. The repos that the 3rd party apps are released on are part of large communities. If one of the programs contained a virus, they would be removed very quickly.
as for risks, you can always brick your iphone/ipod but resetting an reloading a past firmware is never that hard to do.
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