AppleInsider reports that they have learned about a secure data wipe feature in the new iPhone firmware 2.0.
The new iPhone erase all data feature is supposed to function like the Secure Empty Trash function of Mac OS X. Unlike in the current iPhone firmware the erased data would be overwritten several times so it cannot be retrieved again by snoopy tools.
The secure wipe most likely takes about 1 hour on the 8GB iPhone.
More details on AppleInsider. More iPhone News.