I mentioned before that the data on your iPhone can be recovered. That is still true. There is no proven method to securely wipe the iPhone as of this writing.
However, the same man who wrote the scary forensic tool for the iPhone is letting people in on how he prepares items for resale:
* Perform a full restore, but be sure to set the device up as a “new phone”, rather than restore from a backup (of course). This destroys the live file system only, but isn’t really necessary. I do this to be extra safe that no writes to the device occur after wiping (and if they do, will not include any of my personal data).
* Jailbreak the device using something like iLiberty+ and obtain shell access via ssh.
* Find a copy of ‘umount’ for the iPhone. This can be found on the RAM disk, or in other places. Don’t ask me for it. Now force both mount points into read-only mode:
# umount -f /private/var
# mount -o ro /private/var
# mount -o ro /
NOTE: The GUI will be non-responsive when /private/var is mounted read-only, so be sure not to try and use it.
* Wipe both partitions clean by copying /dev/zero over them. Ideally, /dev/random would be better, but it will heat up the CPU considerably and take a much longer period of time. Unless you are trying to hide information from the CIA or some other organization with the resources to perform low-level NAND recovery, a single /dev/zero wipe will suffice:
# cat /dev/zero > /dev/rdisk0s2; cat /dev/zero > /dev/rdisk0s1
* After complete, force the device into recovery mode (Home + Power until “Connect to iTunes”) and then perform another full restore.
* If you are paranoid about a low-level NAND recovery, use /dev/random and repeat these steps about seven times – or simply take a sledge hammer to the device.
To find out more you should visit his website. Remember, it is your identity, and you only get one for free so keep it safe.