disk-formatiphone
I've read a couple guides that talk about restoring the iPhone to it's base operating system, then syncing three different full playlists of music in order to overwrite any previous personal data that might be on the phone and recoverable via basic forensic methods.
I want to believe there is a better way, maybe a simple program that allows you to write zero byte files until the OS is full a couple times over.
What is the best way to format/erase an iPhone for resale?
To erase everything and restore the iPhone to the factory state, go into Settings, then General, then Reset. Press "Erase All Content and Settings". If you have a passcode, you will be prompted to enter it. Select "Erase iPhone" and the wipe will begin. Be sure to have your iPhone connected to a power source as the erase takes a long time. When it's complete, the iPhone will have no SMS, calendar, phone logs, contacts, etc.
No, you need to wipe the entire device using the settings found under Settings > General > Reset > Erase All Contents and Settings. Simply deleting items from iOS applications does not provide any kind of secure deletion, and those files can easily be recovered (although that will be harder and harder as those blocks get overwritten in time).
This provides a one-pass secure delete call that can be liked to OS X's "Secure Empty Trash." While most 3rd party software won't be able to recover your data, government units have far more sophisticated tools that can retrieve data from far worse cases (even physically damaged storage).
This feature was introduced in iOS 2.0 and you can read more about it over at AppleInsider.
Best Answer
The built in “Erase all Content and Settings” function (found in the Settings app, under General → Reset) should be sufficient in virtually all cases.
The 3GS and later iPhones, 3rd generation and later iPod Touches and all iPads use hardware encryption, where all data is stored encrypted in their flash memory. On these devices the wipe function simply deletes the encryption key, rendering the data not much more useful than random noise. On devices without hardware encryption, the wipe function overwrites the entire user partition with ones. This is more secure with flash memory than doing the same on a hard drive (where some residual magnetic field can be detected from the previous data, although the chances of that are likely very low) — it's theoretically possible someone could retrieve some data, but it would be prohibitively expensive and time consuming.
Unless you're keeping extremely sensitive data on there (i.e. state secrets or evidence of a massive criminal conspiracy), I wouldn't worry about it once it's wiped.
Source: Apple Article HT2110 — iOS: Understanding 'Erase All Content and Settings'