I lock it and put it on 4 hours (4 hours without use, its relocked). If someone found it, likely they can use it to call me "home". But after sleeping for the night, the next day the phone would be locked. Also, even when a phone is locked, they can still TAKE calls - so I can call my phone. I also set it to delete all my data if they fail to unlock the phone 10 times (put in the wrong code 10 times). Finally, iPhone has a feature called "find my phone" which you can use to find the approximate area your phone is, and "remote wipe" which you can use to delete all the data on your phone from any computer. I mean, you have your friends full names, maybe emails, and maybe photos on your phone they even if you don't care, maybe they do!? So its about responsibility as well. I think its right thing to do to make a reasonable effort to protect your friends information especially in this day and age of identity theft. If the person who finds your phone is a bad person, they might use it to call long distance - just to be mean. My dad lost his phone once and they did that! A$$holes right? Was like $65 in calls or something. Conclusion - lock it!

Yes, you should be able to restore it even if it gets wiped from your iTunes. Next time you're in an apple store, ask an employee to be sure, but I'd be surprised if it didn't, especially because you don't jailbreak!