Here’s a prediction: in the future, iPods will be stolen more than they are now, but not for their value as a piece of hardware. When we have 250Gb iPod devices available, people will cram them full of data like email, IM transcripts, credentials for accessing other systems, personal financial information, etc.
We would be wise to start thinking about how to build in a solid AES implementation into devices like this, along the lines of how Apple’s OS X ships with FileVault.
Imagine that all the data that you have created over a 5 year period was grabbed right out of your hand right as the doors to the train are closing on your daily commute.
And imagine how relieved you would feel knowing that the thief would need 300 years of computing time to get the data out of the stolen device.