In the iPhone 2.0.2 firmware, there was a major security flaw that allowed access to private data even with security passcode turned on.
In just two steps anyone can have access to a lot of private data on the phone.
After you slide to unluck the phone, you will be on the enter passcode screen
1. click on 'emergency call'
2. double tap on the home button
Click here and then double tap the home button to access favorites without entering a passcode! and you'll have full access to your cellphones private information in Mail, SMS, Contacts and safari browser.from gizmodo:"Done. You are now in your favorites. This seems like a feature, because you may want to have emergency number in your favorites for quick dial. The security problem here is double. The first: anyone picking up your phone can make a call to anyone in your favorites. On top of that, this also opens access to your full Address Book, the dial keypad, and your voice mail.
If that wasn't bad enough, the second one is even worse: if you tap on the blue arrows next to the names, it will give you full access to the private information in a favorite entry. And it goes downhill from there:
• If you click in a mail address, it will give you full access to the Mail application. All your mail will be exposed.
• If there's a URL in your contact (or in a mail message) you can click on it and have full access to Safari.
• If you click on send text message in a contact, it will give you full access to all your SMS."
Here is an article on Gizmodo as well as a video demo.They have also provided a solution by changing the function of your home button so that when you double tap it, it will perform a different task.1. In the iPhone home, go to Settings.
2. Click on General.
3. Click on Home Button.
4. Click on either "Home" or "iPod".This is what you should see
Change the function of the home button to prevent this risk!
It has been reported that apple will fix this security flaw in their next firmware update, but there has been no announecment to when that will be. For now just use this simple solution, i hope it helps!