The Register reports that the security on the iPhone 4 can easily be bypassed by a particular sequence of key presses. Apparently earlier iPhones suffered from a similar issue.
On a recent earnings call, Steve Jobs amusingly described Apple's iPhone as being more "open" than Google's Android operating system. If the iPhone really were in fact open at all, security problems like this would have more likely been found and fixed before they were widely distributed. End users would have been able to patch their own phones, if they wanted to, using the source code to Android itself. There are how-to articles and online support communities to help. And finally, if iPhone were really an open platform, other companies or enthusiasts could port Adobe Flash or Java to run on it.
The bottom line is you will never be able to fully trust your machine if it is running Apple software. You don't know if it's secure, and without source code you will never know if apps are stealing your data or are making transactions on your account. It's sad to hear Steve Jobs trying to claim the mantle of being "open" when it's so clear he wants to completely control the experience of every one of his customers - to their detriment, with at best an ephemeral benefit in return.