they could implement "Recovery Mode"
There are some really good ideas on here.
I would hope that maybe one could load a settings control that would allow some of this stuff to work.
I like the idea of logging with MobileMe or even iTMS user account, that would push a message to a reported lost phone, that would put the phone in "recovery mode."
It could have a message, something like "please return my lost iPhone. Call me, or drop this off at an AppleStore. (perhaps a cash reward offer option, as well, as mentioned, with or without the owner's name and picture from their contact entry.
And have two buttons.
Green: [Call Me] (undisclosed phone number, dials the "home" listing in the "me" registered contact, or any number in the "me" contact aside from the phone's own number, or a pre-specified alternate emergency contact, set by the owner in the preferences before-hand.
Red: [Unlock] that goes to the number pad with a warning that after 10 failed attempts (ten total failed attempts, regardless of restart or any other activity, not just ten sequential failed attempts, and count reset by other activity) the phone and SIM will be disabled, erased, and only restorable by the account owner's request by Apple or AT&T, or the computer where the master iTunes database resides. It would be bricked, un-restoreable, and worthless otherwise, even to re-sell as stolen property.
By signing up for the recovery mode push service, it could also have a confirmed license agreement for AT&T or Apple to pay a standard cash reward amount to someone who brings in a lost iPhone, and that sum charged to the owners AT&T bill or ITMS account, and the iPhone shipped to the owner's AT&T or ITMS billing address, or cash payable when the phone is picked up from an AT&T or AppleStore location. Optional to the owner at the time of reporting the device lost or stolen, of course. One wouldn't want a rash of people stealing and returning iPhones just to steal the amount of the reward from the owner, through a legitimate channel.
It could also deny computer sync access in recovery mode without the security code, and report itself, it's GPS/Cellular location or even some sort of short video stream, or photo capture interval from the camera, via a connected computer's internet access if connected by sync cable, or report itself via unsecured wireless networks, or cellular data service access, if in range of either one.
It could also, if the owner chooses to report "stolen" rather than simply "lost", for recovery mode, it could report that useage and GPS information to the police agency of the owner's specification. Might make iPhones sour for pick pockets and thieves. It could activate a re-start interval, as well, to keep it's GPS and communications systems up, behind the locked screen. Even if they force it to power down, a time interval like 5 minutes or something, and it would auto-restart, right back into recover mode, until the battery is dead. A powered-down device can't report itself. OR power down in "recovery mode" could be false, and still ping-reporting itself while it remains in low-power mode, and the screen remains off. The battery would probably last a while that way, too. Without screen or audio feedback, how would someone know if it were reporting itself via any available connection? unless someone has a radio frequency sweeper for those frequencies, to detect the radio transmissions. Unless they have it near unshielded speakers, and hear the cell beacon, as iPhones tend to do.
This "recovery mode", with a very slight variation, could also be the standard default configuration in the box, before the iPhone is initialized, as an inventory control measure, to report shop-lifted iPhones that try to get powered up. If people shop-lift, and they DO (a lowlife from West Des Moines got caught doing it A LOT, here in my neck of the woods, it was on Dateline the other night) and the phone reports them to the police when they power it up. Buyers of stolen property can probably point a finger back at who sold it to them, at least, even an ebay user account, or some sort of lead for investigators.
A communications device as versatile as this has lots of potential for security, as well as it's legitimate usage. It can just as easily sour itself to nefarious activity, or report itself when lost.