If you write the application, then you have various options for protecting the files stored on the device. I gave a presentation on this at Voices That Matter this year, but to summarise:

• NSFileProtection API lets you use the same device key as the filesystem encryption, but ensure that the files are protected when the device is locked;
• CommonCrypto and OpenSSL are a bit harder to use, but still fairly straightforward, you control the encryption and can use the keychain for key management;
• writing your own encryption implementation would be a bad choice.

If you write the application, then you have various options for protecting the files stored on the device. I gave a presentation on this at Voices That Matter this year, but to summarise:

• NSFileProtection API lets you use the same device key as the filesystem encryption, but ensure that the files are protected when the device is locked by additionally deriving a second key from the user's passcode;
• CommonCrypto and OpenSSL are a bit harder to use, but still fairly straightforward, you control the encryption and can use the keychain for key management;
• writing your own encryption implementation would be a bad choice.