http://www.macrumors.com/2008/08/27/iphone-passcode-flaw-already-addressed-for-future-firmware-update/
Gizmodo publicizes a security flaw that was publicly posted last night to MacRumors' Discussion Forum. The vulnerability allows individuals to easily bypass the built-in passcode protection offered by Apple to lock your iPhone.
The workaround allows unauthorized individuals access to the iPhone's Safari, Contacts list, SMS, Maps, and Mail.
MacRumors has been told that this security flaw was already reported to Apple earlier this month and has been acknowledged as an issue. A fix will presumably be included in a future firmware update.
http://gizmodo.com/5042332/huge-iphone-security-flaw-puts-all-private-information-at-risk
http://forums.macrumors.com/showthread.php?t=551617