I'm still loving my iPhone 3G, but over the weekend I spotted a problem with it. A small bit of dirt, about the size of a grain of sand, has appeared inside the screen.

It is pretty much in the middle of the screen, so is fairly annoying.

I guess I need to make a trip to an Apple store. Does anyone know if they are likely to fix/replace it or just say "tough" ? I'd certainly count it as a manufacturing defect, there shouldn't be any dirt in there get dislodged.

If they do replace it, presumably that will be with a refurb ?

They will probably replace it. And it will be with a refurb, but one that has no visible scratches, etc.

As far as I can tell, the retail stores will at most reflash firmware on a phone. If the problem still exists after that, they swap the phone, and send the old one off to be worked on some place. Once fixed, the phones start going back out to the stores as spare units.

It's a nice setup as you can leave the store with a working phone, vs having to deal with a loaner and waiting for yours to come back from repair.

Do they backup/restore to move my stuff to the new one ? Also, what happens about wiping the old one clean of my data ?

Make sure you have a full backup of the phone before you go out to the apple store. Connect the phone and synch once with iTunes. Look in iTunes under Edit/Preferences/Devices and make sure there's a backup there from that synch time. Then go to the store and get the phone swapped. Then come home and restore the backup.

There is, I believe, an option to erase the old phone's private data right there on the phone itself. If not, you can do it there in the apple store by hooking it up to a computer. Talk to the tech and make sure to get that done before he walks off with it. I'm guessing they'd do that as a matter of course.

If you're really OCD, you can do all of the above on a laptop that you bring with you to the store.

Yep. Settings - General - Reset (at the bottom), - Erase all Content and Settings. Hitting that will nuke everything, assuming the phone is not jailbroken or otherwise modified.

Depends on how paranoid you are about your data. You can recover data even after you wipe it.

I haven't heard any reports of recovered data with the new secure erase being used in iPhone 2.0+

The dialog claims it takes about an hour to erase - that sounds pretty rigorous to me. Just don't deactivate the phone before erasing - you won't be able to access the feature.

http://discussions.apple.com/thread.jspa?threadID=1604038&tstart=881