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Wired Magazine have just discovered and shared a rather large security hole in the Apple iPhone.

This essentially allows you to bypass the PIN security and gain access to the features of the device including the un-encrypted information stored on the device.

To do this

1. Tap emergency call.

2. Double tap the home button.

This drops you into the iPhones "favorites" section. From here you can make calls or send e-mail, and with a few steps you can browse to the Address Book and then on to Mail, Safari or the SMS application.

You can read more details and a suggested workaround on the Wired Blog