Comment Already fixed in iPhone OS 4.0 (Score 5, Interesting) 264
Ya, one of the new features in iPhone OS 4.0 is "Data Protection". Specified files for applications are on the fly encrypted and decrypted. The phone has to be unlocked (valid pin entered) to access the data.
Seems like they already handled this issue, unless someone wants to test that on an iPhone with 4.0 running on it...