The first shot has been fired in the race to hack the iPhone. Engadget reports that a firmware image is now floating around the Web. The firmware is the operating instructions that live between the hardware and the OS, so being able to peer into that code is often the first step to real hacks. We'll be keeping our eyes glued to places like howardforums.com to see what the first cracks are—and there will be cracks. Here's our initial wishlist:

• Enable the other Bluetooth protocols. Right now, the Bluetooth is crippled so it can only be used for headsets, but with the right uncrippling, you could stream music to wireless speakers, transfer files (like songs and photos) to and from your computer wirelessly and surf the Web on your laptop using your iPhone's data connection.
• Unlock the device so you can put other sim cards into it; particularly useful for taking overseas.
• Enable support for more music and video format
• Upgrade the memory
• Replace the battery yourself (sure to come)
• And the holy grail: Let it run third-party apps. If this has a full OS in it, there should be endless uses. Then we'd really be talking Jesus Phone.
• Oh, and play Tetris Blocks. Every device must eventually play Tetris Blocks.

What do you want to see it do? Let us know in the comments.