From the article, it looks like it was remote wiped before anyone could play with the new OS.
Yeah, they did. I was thinking about the "find my phone" feature.
Good point. If I were in their position, the first thing I would have done was to pull the SIM card to stop Apple from killing the device. You'd think that Apple would have these constantly sending their GPS coordinates out so you could have tracked it the moment it left the Apple campus.
However, in this case I think Apple has a pretty clear idea of where the device currently is :).
320 / 480 = 0.666666667 480 / 960 = 0.5
EDIT: Gruber says 960 × 640
I bet whoever lost that thing wishes they had signed up for MobileMe...