Moisture Can Damage iPhone Even If It Comes From Sweat
As we all know iPhone is very very sensitive towards moisture and a decent amount of exposure to moisture can lead to a damaged iPhone.
And to prove that here is story where people took their iPhone to gym and it got damaged because it came in contact with their sweat while working out.
Check out the full video of the story at the link.
So, please note that in the video its mentioned the Apple refused to replace the device as it gives warning against taking the iPhone in moist areas. So, do take care of your iPhone as Apple is not coming to help you out on that 
.
FYI,
Just wanted to advise everyone as to what I was told by Apple tech support. The wireless had stopped working after the upgrade to firmware 3.0. Even though that this is a known issue with the Iphone. When the phone was shipped to Apple they informed me that the water sensor had been activated and that I would have to pay for a replacement phone. My phone has never been in the water and after doing some research I found this to be a common problem.
Apple iPhone 3G dies when exposed to Belgian water test « Antwerp Calling
Apple also informed me that the Iphone is not suitable for use in the marine environment. The environment falls outside of the 95% relative humidity that are within the iphones environmental specifications. This is bad for me as I live on my IP38 and the condensation caused by taking the phone outside after being in the A/C is killing the phones.