It looks like Geohot has come through again. The video below says it all:
In addition to the video, he has put up a blog post adding the following:
The jailbreak is all software based, and is as simple to use as blackra1n. It is completely untethered, works on all current tethered models(ipt2, 3gs, ipt3), and will probably work on iPad too.
Don’t ask about a release date. You won’t make it happen any sooner.
So not only are we getting an untethered jailbreak for the latest iPod touch models and the 3GS, but there is also a high likelihood that an iPad jailbreak is imminent, a fact which will make our friends over at iPad IMO very happy.