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A restore basically does a "quick format" on all partitions before reloading the OS. Manually selecting the "Erase All Content and Settings" option does a complete wipe on the User partition only, but it physically zeros out the flash memory. I can see this being useful for privacy reasons but I don't see how Apple's software could detect leftover files once a format (even a quick one) has been done. It's likely the person you're talking about either did an upgrade (instead of a restore) or simply restored from a jailbroken backup which put certain custom settings back that wouldn't exist on a non-jailbroken device.

Speaking from personal experience, I have gotten many (and I mean a LOT) of iPhone replacements at several different Apple stores and have always simply restored before taking it in (and setting it up as a new phone of course). Not once have I been caught and/or questioned about having a previously jailbroken device.

Hmm...perhaps they used a recovery tool that would be able to read the files despite the "quick format". But yeah, looks like we're on the same page and perhaps my solution is a bit extreme...but it's the best way to be 100% in my book.
 
Did you do a restore AND perform the "Erase all Content and Settings" after?

yep. Thank you! It did work and he replaced my iphone with a refurb and I can verify the refurb has the 199mb of "other" as well.

I dunno if its cause I showed up late (traffic) and he wanted to get me gone or what but He checked the water indicators, warranty and scanned the phone. By looking at the phone he said "oh you just restored this?" I was like "yeah wanted to give it one last test on the dropped calls before bringing it in" he said ok. I had dust under the screen and 1 hairline crack along the seams.

No trace of jailbreak. He said there was some type of "antenna issue" going on so he swapped it out. Which worked out perfect cause the back of my phone was beat to hell. So now I can finally get a case for this one before I sell it for a 4g.

Thanks again! Just to clarify Geckotek knows what hes talking about! follow the steps he posted before bringing it into Apple for service!
 
fwiw, i've returned a jailbroken iphone in los angeles (still jailbroken) with unlock, with my vodafone australia sim card in it.
your mileage may vary, but you don't need to be that paranoid. re-flash it so that cydia isn't there, return it. they don't have magic sniffing software.
(obviously he let me keep my voda sim card..since i didn't have an ATT one anyway.. and yes, US iphone not australian)

um no i have a tmobile sim, thats the problem, how the hell do i get pass the activation screen?
 
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