The exemption, which was proposed by the Electronic Frontier Foundation (EFF) and strenuously opposed by Apple, could open the floodgates for iPhone apps from major software vendors which would never have been available otherwise.
In addition to the EFF, the jailbreaking exemption was backed by such big names as Mozilla Corporation and Skype.
Thanks to Apple's use of encrypted code during the boot process it was previously a DMCA violation to reverse engineer the iOS. This has allowed them, through the App Store approval process and SDK Terms Of Service, to tightly control what apps were available for the iPhone and even what tools could be used to create them.
The new rules could result in Adobe either releasing Flash for jailbroken iPhones or placing new emphasis on the Adobe AIR Packager for iPhone, introduced in the recently released Flash Professional CS5. Changes in the iPhone SDK TOS earlier this year prompted Adobe to halt future development of the tool.
The new list of DMCA exemptions also includes removing access controls from ebooks in order to enable the read-aloud feature of ebook readers.
You can read the full text of the announcement below.
2010 DMCA Exemption Announcement