SMS messages remain on the iPhone after deletion. When "deleted" on the iPhone, they are technically hidden and marked for deletion. Text messages are then deleted only after sync with iTunes.
In order to recover a deleted text message or messages, run through the following 4 easy steps:
STEP 1:Make sure iTunes doesn't automatically sync with iPhone when connected.
STEP 2:Connect your iPhone to iTunes and Back up by selecting Preferences > Backup from iTunes, or right-click on your iPhone and choose back up.
STEP 3:Restore your iPhone by selecting Restore under Preferences. Note that restoring the iPhone will restore the previous iPhone firmware. Your iPhone will be completely erased after the new firmware is installed. So make sure your back up is good!
STEP 4:The final step will be to restore your iPhone from the back up you created on step 2. This will allow you to restore any data you have backed up, including the "deleted" text messages.http://iphone.jomra.com/2009/06/23/recover-deleted-text-message-on-iphone/
Retrieving Deleted Text Messages from your iPhonehttp://riactant.wordpress.com/2009/05/02/retrieving-deleted-text-messages-from-your-iphone/