The NOR was set up in a way that when the firmware images were flashed there, the RSA signatures were dropped along with the rest of the firmware container. So although iBoot signature checked the kernel, LLB did not signature check iBoot, and the VROM did not signature check LLB.
The VROM doesn't sig check the stuff it jumps to in the NOR. So to use the exploit, one finds a way of writing to the NOR unsigned, either with iBoot hacks or kernel patches. While images are now written to NOR in a way that one can verify the other, like LLB verifying iBoot, the bootrom cannot be written to, so it still defaults to just reading LLB normally, un-signature checked.
This exploit has been fixed on the iPod Touch 2G and the iPhone 3GS. The bootrom sigchecks LLB before jumping to it now, and if the LLB is patched, it will default to DFU mode. The 24kpwn bootrom exploit was later found allowing the device to be fully jailbroken.