It’s practically impossible to fully encrypt your iPhone, but you can significantly improve your smartphone security by updating to iOS 5 and enabling the Passcode Lock feature in the General section of your Settings menu. With iOS 5, your outgoing iMessages should be encrypted, and most modern Apple devices--including all iPads and all iPhones since the iPhone 3GS--have limited data protection built into the hardware, which encrypts some of your data with a unique key generated from your passcode. You can make sure this encryption is working by verifying that the Data Protection feature in your Passcode Lock menu is enabled.
Not many data encryption apps are available for iOS, but you can download voice encryption apps like Kryptos or Cellcrypt to encrypt your outgoing phone calls. Use text encryption apps like Encrypt SMS ($0.99) to keep your text messages secure, and consider picking up the (somewhat pricey) SecuMail app ($49.99) to allow you to send and receive email encrypted using the OpenPGP standard. Apple also provides built-in tools that allow you to remotely wipe your iPhone and ensure that nobody can steal your personal data if your phone is lost or stolen. To use those tools, first turn on the “Find My iPhone” feature and make sure that remote data wipe is enabled; then log in to MobileMe from your PC and select “Wipe All Data” on the device you've picked.
If you have the Siri voice command feature enabled on your iPhone, be aware that it's possible for pranksters and thieves to send texts and email from your locked iPhone by holding down the Home button and dictating messages to Siri. To secure your smartphone against unauthorized Siri use, simply ensure that the "Siri" option in your iPhone Passcode Lock menu is switched off; this will prevent Siri access on your locked iPhone 4S.
Some of these security measures may seem like overkill, but don't forget that our smartphones usually carry some of our most prized personal data, including credit card numbers and financial records. A strong password and reliable encryption are a one-two combination that will ensure your smartphone and the valuable data it contains are secured against unwanted use or intrusion.