This is the process by which full execute and write access is obtained on all the partitions of the iPhone. It is done by patching /etc/fstab to mount the System partition as read-write. This is entirely different from an unlock. Jailbreaking is the first action that must be taken before things like unofficial activation (hacktivation), and unofficial unlocking can be applied.
The original jailbreak also included modifying the afc service (used by iTunes to access the filesystem) to give full filesystem access from root. This was later updated to create a new service (afc2) that allows access to the full filesystem.
Modern jailbreaks also include patching the kernel to get around code signing and other restrictions.
Exploits which were used in order to jailbreak (in chronological order)
- Restore Mode (iBoot had a command named cp, which had access to the whole filesystem)
- Mknod (an upgrade jailbreak)