One feature of the new 2.1 firmware we haven't mentioned is the option to have the iPhone automatically securely wipe your iPhone or iPod Touch after 10 failed passcode attempts.
A nice feature for those who are worried about losing their iPhone, but perhaps better to not enable it if you have young children.
Apple has said they will be releasing the 2.1 firmware on Friday.
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However, I have a better idea. How bout' if Apple lets us define one screenful of text (or maybe text and an image) that is to be displayed when the password is repeatedly wrong. We can put our own message there, giving contact information if we want, offering a reward, chastising an assumed thief, thanking an honest person for returning the phone, or whatever else we want.