Exchange 2007 requires iPhone to have Passcode
At work today we have finally got around to installing our new Windows Small Business Server 2008 and finally getting rid of our dated old SBS 2003 server (although it has has served it's time very well and been very reliable).
However when I have gone to setup the new exchange account on my iPhone, I was prompted to create a Passcode for my iPhone which I first pressed "Cancel" as I have never had one nor wanted one. But then found that the email would not sync until I had done.
This is what I have discovered.
When researching why I soon found this document from Apple selling the feature of Microsoft ActiveSync and soon found this point-by-point feature list.
Noticed I have highlighted "Enforce Password on Device" which got me think that this must be a server-side feature of Exchange 2007, as our previous server didn't require it.
I soon logged on to our server and found that it in fact it is a tickable feature.
"Mobile Mailbox Policy" .
Notice that it, by default, has selected "Require Password" and that the "Minimum Password Length" must be 4 characters long.
So in conclusion, the iPhone requiring a Passcode when setting up Exchange Activesync is BY DESIGN, but can be altered at the server-side by your network administrator.
This is the actual policy that I found to edit the above configuration.