The Exchange Support component in Apple iPhone OS before 3.1, and iPhone OS before 3.1.1 for iPod touch, does not properly implement the "Maximum inactivity time lock" functionality, which allows local users to bypass intended Microsoft Exchange restrictions by choosing a large Require Passcode time value.
https://exchange.xforce.ibmcloud.com/vulnerabilities/53181
http://www.securityfocus.com/bid/36342
http://support.apple.com/kb/HT3860
http://secunia.com/advisories/36677
http://lists.apple.com/archives/security-announce/2009/Sep/msg00001.html