Problem: My iPhone requires a passcode when syncing with Exchange 2007.

This happens because Exchange 2007 security for mobile devices is enabled by default. You can turn it off by the following method.

Solution
1. Open Exchange 2007 Management Console as an administrator. (Navigate Start > Programs > Microsoft Exchange Server 2007.)
2. Navigate to "organization configuration," then choose "client access."
3. Right-click on Windows Mobile Mailbox policy and choose "properties."
4. Select the password tab and uncheck "require password."
5. Apply and OK your selection. Now you can configure your exchange account on your iPhone.

Note: If you have already configured an Exchange account, you must delete it and reboot your iPhone and then add it back.