Take care if you sell your beloved iPhone to an untrusted person: Your phone (as any other PDA or mobile phone) knows everything about you: emails, calls, SMS, visited websites. When the owner of an electronic device changes, it’s a good (read: “mandatory”) practice to perform a full cleanup before sending the device to the new owner.
But it seems that the reset feature available on the iPhone (using iTunes) does not really remove the data! Jonathan Zdziarski wrote a book “iPhone Forensics Manual for Law Enforcement” (check his live demo) about this topic. He was able to recover deleted files on an iPhone! Take care!