erase all content and settings (iMessages are all erased as well correct?)
I want to make sure that everything is erased from my old phone before giving it to a friend of mine.
Everything is erased, but just to provide you with peace of mind, here is a support document that provides instructions on what to do before selling/giving away an iDevice. What to do before selling or giving away your iPhone, iPad, or iPod touch - Apple Support
