Selling your old iPhone could put you at risk for identity theft
Since people use their iPhone for all kinds of computing, the information stored could (the key word is could) be used to steal your identity. So there are a few people out there trying to figure out the proper way to overwrite your data.
The one that most people are trying is copying several playlists multiple times to your phone, thinking this would eventually overwrite the memory, zero it out in a sense. The first flaw with this is that the memory will most likely still have trace fragments that could be pulled. The second is that no one is sure how the file system is set up on the phone; music and application data may be stored in different places.
If you’re going to sell your old iPhone, it’s worth a shot. If you’re truly paranoid, then just sell it to someone you know is trustworthy, like a friend or family member. Safety first, people.