Yes, it's true. I dropped my iPhone in the toilet. I wasn't using either the phone (it was in standby mode) or the toilet -- it was just chance that I had my iPhone in my hand as I went to throw something in the wastebasket... chance that I dropped it... chance that the lid was up... and chance that my iPhone took a bath.
Anyhow, I immediately took it out and dried it the best I could. I Googled
iphone and
toilet and was amazed by
how many people have had the same problem. I took the black plastic cover off, and set it directly under (and about 3" away) from my desktop lamp for a day, and it seemed to dry out ok.
It turns on, and iTunes detects the iPhone but says it needs to be restored before it can be used. I do so, it updates the firmware and restarts, then repeats the same message. This happens over and over again, every time I try to restore.
One of the times, it actually recognized the phone and started restoring my most recent backup (contacts, songs, etc) and then when it restarted, it went right back to the "must be restored" message.
I tried on both my Windows XP machine and my OS X laptop, with the same results.
My next step is to take it to the Apple store and see if they can either fix it, replace it or repair it. I'll keep you posted.
The morale of the story: keep your phone as far away from the bathroom as possible.