The iPhone (or iPod Touch) is a 667MHz computer (albeit one that is only running at 412MHz) with 128MB of RAM and between 4 and 32 GB of flash. For software, it is running a pared down Mac OS X with its standard compliment of a FreeBSD-based userland over a Darwin kernel.
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From a user perspective, one need only add http://apptapp.saurik.com/ as a source to Installer and install the package “Cydia Packager” from the “System” category. You might also consider temporarily disabling the auto-lock feature on your device during the installation, as it will take a few minutes to complete.