WP7: Screen and SIM Locking
When a lock screen password is set, it must be entered after some time of inactivity or when manually locked (sleep mode). Even when locked, however, users can still check the time and date, take calls, make emergency calls, change ringer volume, take pictures, and access music.
Other than entering the correct password, the only way to get full access to the phone is by resetting it to factory settings. This erases all the data and is done automatically after the password is entered incorrectly 5 times in a row, with a warning shown after the 3rd attempt.
To set a lock screen password, go to the App list, tap Settings, and then tap Lock & Wallpaper. From there you can set or change the password, and also set the screen time-out.
When a SIM PIN is set, it must be entered each time after the phone reboots. Until then the phone can’t communicate with the service provider, preventing unauthorized phone calls. If the wrong PIN is entered too many times, the mobile service provider will block the SIM card. While this will keep John Q. Thief from making international calls on your dime, the other phone features are still available with a locked SIM card, and emergency calls can be placed.
To set a SIM PIN, tap Phone > More > Call Settings, and then Turn On SIM Security.
When using your phone with a Microsoft Exchange Server from work, they can impose security requirements, such as requiring a lock screen password.