Sep 12 2008
Firmware 2.1 Wipes Data after 10 Incorrect Password Inputs
A major security Flaw in the iPhone was discovered a few weeks ago. This flaw bypassed the Lock and allowed access to Users private data. A workaround to fix that was posted here.
Apple has hence beefed up the Security in the new 2.1 Firmware and now provides a more secure option which Wipes all your Data if Incorrect Password is given 10 times in a row.
Check the ScreenShot below :

This option is currently available in the iPod 2.1 Firmware and I’m sure that it will be available in the iPhone 2.1 Firmware too.

Sep 12, 2008 @ 19:51:16
Now I don’t understand how this solves the earlier issue!
Sep 12, 2008 @ 20:13:45
@Goobi : Note that the earlier Issue was only iPhone specific, whether that Issue is fixed or not is not known yet as iPhone 2.1 is not been tested.
But most prolly as Apple had acknowledged the flaw, it must be fixed already in the iPhone 2.1 Update.
Apple has just improved its Security, that’s all……
Download iPhone 2.1 Firmware » The Apple Daily
Sep 12, 2008 @ 21:48:13
[...] Firmware 2.1 Wipes Data after 10 Incorrect Password Inputs [...]
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Mar 28, 2009 @ 12:13:16
Great, very useful password security option. Security is what essential always for passwords.
Apr 25, 2009 @ 14:03:56
Helpful for security but if at all we forget the password is there anyway to recover it.
Apr 27, 2009 @ 13:54:22
Nice way out for securing private data. But is there any kind of back up if the password is lost.