A security flaw with the passcode lock has been discovered in the iPhone 2.1 firmware.

A good number of users have posted on various forums that if you enable the passcode lock and disable SMS preview, your messages could still be seen and read, possibly by someone other than you.
To duplicate this flaw just go to settings and enable passcode lock.
Not a major issue but definitely one that should be addressed at some point (and more than likely will be addressed in the next update).
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I think they need some new QA people -
Is there a way to have the message not show up on the screen when the phone is woke or someone is just playing wit h it?