Report your phone stolen immediately - There were reports online about stolen phones being used to rack up $20,000+ worth of charges. Its hard to overcome the disbelief that your phone has been stolen, however better safe than sorry. It is best to report your phone stolen ASAP.
Get insurance - Apple Care protection extends your warranty (which I had), and is not insurance. Supposedly Apple offers some kind of insurance (according to the AT&T representative), but I am unable to find more information. Also, you may want to follow up with your home insurance provider to see if its covered ($400 may slide under your deductible though).
Use a keypad/passcode lock - I did not set the passcode on the iPhone. I know, I know...silly me. However, this passcode is easily bypassed thanks to a vulnerability described here. This has to do with the "Emergency Call" feature in the iPhone, which could be used to not only make a call even though the phone is locked (which is still the case in the latest firmware) but launch applications as well. The only other method available to get around the passcode is to restore the iPhone, which would wipe all the data off of it, but still give an attacker access to your cell service if it has not already been de-activated.
Don't store your email passwords on your phone - This is a hard one. On the one hand we tell everyone to use good, if not great, passwords. But, imagine trying to enter a 12 character passwords, mixing upper/lower case, letters, numbers, and symbols on your iPhone? To quote someone from the #pauldotcom IRC chat room, "Ugh.". If you do store passwords on your phone, make sure they are not used anywhere else.
Use security software on your phone - This is an interesting dilema, if you hack your iPhone it most likely prevents you from applying security updates from Apple (which fix things such as the passcode bypass). These updates will break all of the modifications made to your iPhone, including the hack to change providers. However, hacking your iPhone allows you to install 3rd party applications, such as iphonelockbox, which lets you encrypt your passwords and other information on your iPhone. Apple is supposed to make available the ability to install 3rd party applications on your iPhone sometime in February 2008, so this may be a wait and see situation.
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