Lost iPhone - how good is the PIN protection?

My iPhone was recently stolen and I'm concerned about the data that I had on it. The phone was PIN protected. How good is this PIN protection? Is it possible someone can recover the data from the phone without knowing the PIN?
Given in the UK if a phone is stolen its completely useless since the IMEI is blocked on all networks, I assume that it can still be used in an ipod touch type fashion? Is that so?

In regards to the iPhone's passode lock feature, if someone knows what they are doing and has the proper tools/utility, an assigned passcode lock can be bypassed - just as if someone wants to break in to your house or vehicle that is locked - where there is a will, there is a way.
Doubtful whoever stole your iPhone is interested in your data. If you had the erase data feature enabled, which completely erases the iPhone after 10 failed passcode attempts, you are covered there.

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