How does jailbreaking your iPhone affect it?

According to Apple, jailbreaking your iphone could cause it to not work properly. They say the phone could become unstable and stop working. Of course if you do it wrong, you run the risk of destroying the phone. Of course Apple doesn't want you to jailbreak the iphone, but still, you take your chances.

If you jailbreak your iphone and aren't happy with the results, you can plug it in to iTunes and restore the original settings. This will return the iphone to its non-jailbroken state.

Perhaps the biggest issue is if you do jailbreak and then unlock your iphone, it will most likely void the warranty. If that happens, they will not pay for any future repairs for the phone. You can get a little more information on this topic here.