There are a few applications that can be downloaded form Installer that can seriously mess up your iPhone. These will be listed in this thread, which will be updated as new dangerous apps come out and old ones are fixed.
While some users have reported successfully using these applications, be aware that it is possible for them to make your phone completely unresponsive, as Kate did to mine. The methods I used to recover the phone would not be easy to do for a novice computer user. So, use at your own risk.
If you know of any other apps or packages that should be avoided, please say so below and I will ad them
LogoMe:
Currently, this application is just as - if not more - dangerous than Kate. It is an app that can change your boot logo without having to restore your device. Great concept, right? Well, the developer of the app probably didn't put much time into it. If you use it, there's a very good chance that your device will go into DFU mode - you will not be able to use SSH, remove the phone from DFU, and therefore, everything on your device
will be lost.
Caterpillar/Kate:
Caterpillar, now known as Kate, should be avoided at all costs. The features it includes work because of the app tinkering with the filesystem in such ways that the phone is unstable. Symptoms reported include flashing black and white lines, icon order reset, all settings reset, and the iPhone being inoperable. In most cases, a restore is necessary.
Caution thread for Kate
"Surprise" Winterboard Theme:
Installing this theme will cause the iPhone to play a Rick Astley song upon boot, and then become unresponsive. A Restore will be required. Don't just be caution about this, avoid it completely.
Screenshot:
Screenshot was the first screenshot-taking application for the iPhone. It too however, presents issues. A common result of the app is flashing black and white lines, as well as refusal to boot.
Note that you can also take screenshots with the application 'Capture' and with the method from Apple that can be enabled.
Caution thread for Screenshot
Customize 2.0:
Especially in the alpha and beta stages, this version of Customize is dangerous. In commonly results in the SWOD (Spinning Wheel of Death) in which the iPhone is hung. Refusal to boot has also been reported, as well as the phone being thrown into DFU mode.
Caution thread for Customize 2.0
"Tap Tap Revolution" Guitar Hero theme:
While the application Tap Tap Revolution is safe, this theme is not on firmware 1.1.3 and up. After it has been installed, the iPhone will reboot and will not boot, it will simply hang on the Apple logo and you will have to Restore unless you have SSH turned on.
If you do have SSH turned on, SSH into your iPhone and delete TTR.app, located in the /Applications folder. Then reboot.
Caution thread for the Guitar Hero theme
Ants:
Ants can cause the phone to get very slow, and eventually crash. Having too many 'Ants' on the screen at once will cause everything else to slow down, and once it goes on for long enough, the phone will crash.
If you do use Ants, do not set the application to use too many 'Ants'.
vWallpaper:
While vWallpaper is a great concept, the videos can cause lagging and flashing black and white lines. The phone may randomly reboot at times and/or refuse to boot. It's probably wise to avoid this app until it becomes more stable.
Apollo IM:
Apollo may crash at times, and in turn cause the entire phone to do so. Once the phone boots, it will continuously reboot, leading to a Restore.
Alternatives to the application include MobileChat and Fring.
iToday:
iToday can cause all of the applications on the iPhone to hand upon launch and then crash. It can also hang the entire iPhone and leave no option but to Restore.