I recommend you don't, not simply because it's illegal, but because if you managed to get enough money to buy an iPhone with os 4, you will have enough money for whatever apps you need.
Sure, you could save that money by jailbreaking it, but as far as i've heard it causes a truckton of complications and imo isn't worth it. I have an iPod touch, and there's more than enough free apps to do anything you need with it. Most I have seen apart from big games are only £0.59 (i'm guessing also about $0.99) and if thats not cheap enough, theres http://www.freeappaday.com/ which features free apps, features paid apps, and also makes apps free for a day, meaning you can download whatever they manage to make free and you won't have to pay for it, ever. (There's also a FAAD app...)