Staff Techdrunk 
The much awaited Apple iPhone App Store is now finally available for the Apple iPhone owners via Apple iTunes. To access the iPhone App Store, you need to download and install the latest version of iTunes, that is, iTunes 7.7. You can download applications made specifically for your Apple iPhone from the iPhone App Store, that features both paid and free applications. These applications are designed to make your iPhone 3G experience a truly unique one.
Now here is the catch. Though these applications were available for the iPhone before too, but the only hurdle was that the essential iPhone 2.0 software that was required to run these applications on the last generation iPhones was missing. However, now even that hurdle has been eliminated and just about everyone with an Apple iPhone, can now easily download the new updated version and install the Apple iPhone Software Version 2.0.
However, use caution before installing the update, as the new version will completely format your phone and erase the data altogether. Hence, I would strongly advise, that you do a complete synchronization of your data with your Mac or PC. In order to install this firmware, you will have to do it manually by pressing the Option key (Shift under Windows) when pressing the “Check for Update” button in iTunes version 7.7. Then select the .ipsw file manually. If for some reason your download is a “.zip” file, rename it to “.ipsw” before proceeding.
According to Apple, “Normally if you choose to update, the iPhone or iPod touch software is updated but your settings and media are not affected. If your device currently has a software version prior to 2.0 (1.x) and you are updating to software version 2.0 or later, all data on your device will be erased in order to perform install the new software. In this case, iTunes will offer to create a one-time media backup of your device depending on what content is on your device and what content is stored in the iTunes Library you are connected to. You should ensure that you have enough free space on your Mac or PC to accommodate a backup that matches the capacity of your iPhone or iPod touch (4 GB, 8 GB, 16 GB, or 32 GB) if you proceed with the this backup.”
Here are a couple of informative videos that should give you an idea about the new iPhone software version 2.0
