Here is a video on youtube that shows how to bypass the iPhone's passcode security feature and how to fix it. New way to bypass Iphone 4 passcode / password
Hack was confirmed already by Apple.
According to AllThingsD - "Reached for comment, Apple said it is hard at work on a fix. “Apple takes user security very seriously” spokeswoman Trudy Muller told AllThingsD. “We are aware of this issue, and will deliver a fix in a future software update.”"
Some says that it is jailbroken.
But to make sure, you can try it by yourself.