Weird that this came up again; this happened in August and there was a really crazy media frenzy at the time which mostly died down (although I do get a few random emails time to time).
And yeah, I do work for The Tartan.
I used to edit The Tartan.
Apperantly, as he told me, the police contacted apple which gave them the exact position of the mobile phone through the build in gps device, so the police could just pick it up.
If you use Mobile Me and register your iphone with it you can track your iphone as well as make it play a noise for 2 minutes and show an alert.
As someone who recently had to replace an iPhone at full price (unwilling to sign up for another two years on AT&T's horrible service in SF). I recommend looking into using this _before_ you lose/have stolen your iPhone.
It only worked when connected to an interweb, of course.
