Noticing a "Policy Requirement" error when trying to use your Microsoft Exchange account after upgrading to OS 3.1? Then there's a good chance you're not using an iPhone 3GS, as Apple has just confirmed via a support page that the upgrade can now enforce the Exchange ActiveSync mailbox policy requiring encryption on the device, which just so happens to only be supported by the 3GS (guess that "S" stands for more than just speed). Not surprisingly, the only solution for non-3GS users is to contact their Exchange Server administrator and hope that they're willing to change the policy to no longer require device encryption.

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iPhone OS 3.1 enforcing Exchange device encryption, only supported by iPhone 3GS