It is based on the iPhone IMEI code/serial number, AFAIK. It works on the iPod Touch as well - as long as it is in range of a Wi-Fi network.
The only way to beat it, currently, is to turn the iPhone off and never turn it back on...
Actually, not sure what jailbreaking will do... But as it is firmware based, unless they can reprogram the IMEI or serial number, it should even work then.
Windows Mobile supports the remote wipe aspect and should, in theory, be able to track the location of GPS enabled WM 'phones.
I believe the corporate deployment tool for the iPhone has at least the remote wipe, when not the tracking feature.