Google has set plenty of restrictions on the functionality of apps for Glass, the head-mounted display it is now shipping out to early adopters. At the company’s annual developer conference, I/O, which kicks off today, it will show app creators how to break those rules.

One conference session will be called “Voiding Your Warranty: Hacking Glass.” But it could be controversial to encourage experimentation with a product that at once has wowed people with its possibilities and spurred uneasy imaginings of a society subject to ubiquitous, user-generated surveillance. Google clearly wants developers to help explore the limits of what Glass can do, and yet Glass is not even on the market yet, and a handful of bars and cafés have already banned the hardware.

“Google really, really loves this project. But they are terrified,” says Chris Maddern, among a limited number of software developers who got to buy a $1,500 model through Google’s “Explorers” program. “There are so many things that can go wrong between now and when it’s in consumer hands.”

In this context, Maddern says, he understands Google’s relatively restrictive API, the gateway through which developers’ Web-based apps, or “Glassware,” can interact with Glass’s modified Android operating system—restrictions that have, at least officially, put on hold what he sees as “almost every really cool application for wearable computing.” For example, the API doesn’t allow developers to analyze a person’s location, videos, or photos in real time, so no apps that recognize the face of someone chatting with a Glass wearer; no augmented-reality-style apps that suggest dinner spots during a stroll.

These are possibilities, however, and Google is clearly encouraging developers to experiment with such “hacks,” as they are called for now. These hacks could influence the final shape that Glass takes. No one knows what the platform will look like or how much it will cost if Glass hits the market next year as planned (there is not even an official Glassware portal or store yet, though Maddern started an unofficial one, and so have others).

When the first independent developer recently found a way to jailbreak the device to run custom applications, causing a hubbub, Google staff shot back on Twitter: “Yes, Glass is hackable. Duh.” Already, one developer has used facial-recognition technology with Glass to build an app for doctors that calls up a patient’s files. Another allows wearers to take a picture with a wink, making photography less obvious than the Google setup of having wearers speak to the device.

Most early apps created by Google itself are more prosaic, extending sharing capabilities seen on smartphones. Glassagram, for instance, uploads photos with filters. Beam makes it possible to share YouTube videos. Glass Tweet helps users, well, tweet.

Google has also worked directly with a handful larger developers, including the mobile-only social network Path and the New York Times, which created an app that displays the latest breaking news headlines to Glass wearers inside the device’s small head-mounted display. The popular life-organizing app Evernote is working on its own software for Glass but won’t say more about how it will work. So is Twitter. Facebook CEO Mark Zuckerberg has been impressed with the hardware, and any app Facebook launches may well be a hit (see “Facebook Will Make the Most Popular App for Google Glass”). More apps are expected to surface during and after Google’s conference this week.

For consumer-oriented developers, one big question is whether Glass will create entirely new businesses in the same way that the opening of Apple’s app store launched a multibillion-dollar app economy. For now, Google’s terms of service don’t allow developers to charge for apps or show advertisements, but that probably won’t be true forever. And few developers yet have access to the hardware—Maddern says he gets “ludicrous offers” every day to work with large consumer companies that want to get their hands on it.

If Glassware does become a business, Google’s own venture capital division, Google Ventures, is likely to benefit. In April, in an unusual arrangement, it joined with two other top-tier venture firms, Andreessen Horowitz and Kleiner Perkins Caufield & Byers, to launch the Glass Collective, an investment syndicate that is sharing opportunities to provide seed funding to Glass startups.

So far, the Glass Collective has gotten “many dozens” of pitches, and the three firms meet once a week to discuss them together, says Google Ventures managing partner Bill Maris. The first funding announcements should come soon, he says, though each firm will make its own decisions, and the syndicate doesn’t have a dedicated fund. Most pitches so far relate to the obvious features of Glass—unique ways to send messages, share photos or video, or tap into a person’s location, he says. Others are specific to industry sectors and could target smaller markets, such as medicine (see “Will Anyone Build a Killer App for Google Glass?”).

Much depends, of course, on the success of Google Glass itself, and that is far from a given. One crucial factor is its price—many feel it should cost no more than a high-end smartphone accessory. The other main question is whether Google succeeds at making Glass cool, or at least socially acceptable.

“Will Glass be a platform? It’s really, really hard to create a platform,” Maris says. “It takes a lot of money, dedication, distribution, and acceptance from consumers. The important question is, will the device get wide distribution? If the answer to that is yes, business models will come.”