How to "format" an iPhone to clear your data completely

[wraggster]

We briefly mentioned using junk data to overwrite the the iPhone's flash as a last-ditch method of securely clearing off your user data yesterday, and although we were half-joking, that's more or less your only option until Apple provides a proper secure erase feature. Security researcher Rich Mogull has helpfully laid out the steps for you, and they're basically what you'd expect: restore your iPhone, don't sync any personal data to it, and then manually transfer three different playlists large enough to fill the flash. Essentially you're doing a manual three-pass overwrite, which is pretty much exactly the long and tedious process it sounds like -- but we wouldn't dream of selling or giving away our iPhones (or any other phone with personal data on it) without struggling through it.

http://www.engadget.com/2008/05/21/how-to-format-an-iphone-to-clear-your-data-completely/