According to the security firm Sophos, which wrote about the exploitation after a Dutch ISP spotted it late last week, the worm attacks jailbroken iPhone and iPod Touch devices only.

The worm “uses command-and-control, like a traditional PC botnet,” Sophos wrote in a blog post on Saturday to warn users about the exploit. “It configures two startup scripts, one to execute the worm on boot-up, and the other to create a connection to a Lithuanian server to upload stolen data and cede control to the bot master.”

Jailbreaking, which has been around for about two years, is a hack that enables iPhone and iPod Touch users to download applications unavailable through Apple’s App Store.

Sophos wrote that the worm attacks users on several ISPs, including UPC in the Netherlands, Optus in Australia, and T-Mobile in several countries worldwide. Worse, the worm spreads faster on a Wi-Fi connection than a 3G connection. Users with affected devices might notice extremely short battery life while on Wi-Fi. According to Sophos, that’s mainly due to the worm engaging in “so much network activity.”

When a device is infected, it’s assigned a unique number so that the attackers can easily pinpoint a single device. It also looks for authentication systems that use SMS, better known as mTANs. mTANs are frequently used by banks that send an SMS message with a password to mobile phones, allowing people to log in to their online accounts, Sophos wrote.

Sophos recommends that people with infected iPhones and iPod Touch devices restore them back to Apple’s most recent firmware update. It appears that there is no other way to fix the problem… for now at least

Gizmo5’s interface is compact and rectangular, with tabs on the top just below the Menu bar and a series of  commands like Chat and Add Contact available at the bottom. There are very few differences between Gizmo’s design and its biggest competitor’s, and a little originality could’ve gone a long way here.

Also similar to Skype, Gizmo provides free VoIP for computer-to-computer voice chatting as well as text chatting. It also allows for computer-to-telephone voice chatting for both mobile phones and landlines. It has one feature that Skype lacks: it lets you conference call with multiple PCs by entering in a random, shared number. Overall, the sound clarity and quality was excellent, with no lagging nor echoing. Gizmo also says it provides asymmetrical chat-client VoIP, so you can use Gizmo and your headset to talk to somebody on Windows Live or Google Talk. We couldn’t get that feature to work, but it’s a smart idea and we hope it gets debugged soon.

Overall, Gizmo’s got some good stuff and some room for improvement. If you despise Skype or are just interested in alternatives, you might want to give this one a try, but otherwise we’d recommend holding off.

The Gizmo5 team now joins Google Voice, enabling it to become a stand-alone phone service — like Skype. Skype is gaining momentum as an alternative to traditional telcos and wireless carriers in international calling situations. Skype has 480 million users around the world. For example, Skype with WiFi on my iPod Touch turns it into a phone. I spend $2.95 per month to make unlimited calls in the US and Canada. But I can easily switch my account online to cover Europe or the entire world for a very modest increase over that fee.

Expect a similar suite of calling plans and services to roll out from Google Voice, making the traditional telcos quite grumpy. Arguably Google has the capacity to popularize VoIP calling across networks in ways that even Skype cannot. Previously the Google Voice service required an underlying account and telephone  number from a traditional telco. Now it doesn’t need one.