I'm highly considering jail-breaking my iPhone.
What do you think the advantages and disadvantages would be? How would I do it? If I system restore would I get my warranty back?
I recommend doing the jailbreak as it's safe and there are lots of tools that you can use to jailbreak and if you are not factory unlocked you can also unlock it.
You can jailbreak and if something happens and you need to get the warranty just rollback to the official firmware without the jailbreak and they can't tell if your iPhone have been jailbroken before. My i3G is jailbroken and unlocked and I have had no issues.. I bought it in 2009...