Temporary delete, Full delete, and Partial delete using iTunes
Well, I don't know of any other phone (or address boor for that matter) that has an option to delete all contacts, but whatever.
Just about every Samsung, LG, and Motorola phone I've ever owned has had this capability, in addition to "Copy to SIM", "Copy from SIM", "Copy ALL" to or from SIM, same options for "Move", and the ability to tick multiple contacts for other group actions, like Send via Bluetooth. Not to mention the ability to have my phone handle all my contacts directly on the SIM card, making destroyed phones impervious to loss of contacts. Seems to me that Apple ought to step up their game (either give me those nifty contact management capabilities on my iPhone or make MobileMe completely free). But I digress...
You don't need an APP and you don't have to do anything really special to wipe out your iPhone contacts.
There are a few ways, and I will cover two of them. #1 - Remove all contacts from iPhone only (makes Syncing contacts in the future a disaster)
1. Connect iPhone to your PC or MAC - let it finish Syncing
2. Select the iPhone in iTunes
3. Click the Info tab
4. Un-tick the "Sync Address Book Contacts" box
You will be prompted about what to do with your contacts. Choose to remove/delete them.
5. Hit Apply in the bottom right corner of iTunes.
And that's it. iTunes will sync with your phone and all your contacts are deleted from the iPhone. Problem is, if you want to start syncing contacts with your iPhone again, it will add back all the contacts from your Address Book. Then all your new contacts will be meshed together with all your old contacts, and the nightmare begins all over again.
If you want all your contacts gone permanently and you want to be able to start Syncing new contacts from your iPhone, use this other method:
Method #2 - On a MAC:
1. Connect iPhone to your MAC - let it finish Syncing
2. Open up "Address Book" on your MAC and delete all the contacts from there.
2. Select the iPhone in iTunes
3. Click the Info tab
4. Scroll down to "Advanced" section and tick the "Contacts" box - this is a one-time setting that will wipe out your iPhone contacts and replace them with your Address Book contacts (in this case, no contacts at all!). It will only occur the next time you Sync, which is step 5.
5. Hit Apply in the bottom right corner of iTunes.
iTunes will Sync with your iPhone, and then ALL of your contacts are gone PERMANENTLY.
Neither of these methods will erase contacts from your SIM card. I upgraded my wife to an iPhone 4 and took her 3GS, but I only wanted my contacts from my SIM card, so I did the method above, then on my iPhone I went to Settings> Mail, Contacts, Calendars> Import SIM Contacts. After that, I Synced my iPhone again and now my Address Book on my MAC and my iPhone have only my contacts.
You can also use this method (second method) to multi-delete a bunch of contacts. Just follow the same steps, but instead of deleting all contacts from the Address Book, use Shift-Click and Command-Click to select all the contacts you want to delete, and delete only those ones, as pictured here:
Follow the rest of the steps exactly.
For PC, I imagine the principle is the same, but you'll need to find where iTunes is storing all of the contacts from your iPhone.