What are the downsides (if any) of jailbreaking my iPhone?

It voids the warranty.

…UNTIL you restore it to factory defaults. Other than that there are really no downsides.
Some apps make your iPod/iPhone freeze though.

I’ve read that it causes minor instability. Like it’s said above it voids your warranty so god forbid anything happens to your phone you’re SOL.

if it DOES crash can I still restore it back to default?

Yes you can. If all else fails, just boot it into recovery mode and do a manual restore.

There’s a VERY slim chance it will crash though. VERY SLIM.

yeah thats what I’ve heard. Where can I find a list of apps?

google.

“Native 3rd party iPhone App List”

yup, restore to factory defaults, and they have no way of telling it was jailbroken. I love my jailbreak simply for the forgotten features like themes, backgrounds behind your icons, local games, its awesome.

Uh, it doesn’t void your warenty lol. Its just software, and if anything goes wrong you can just restore in iTunes. It’s really easy to do, and you probly won’t even mess up. And there aren’t really any side affects either.