It doesn't mean that at all. The story specifically states that you need to log back into the admin account for the data to be wiped. So it sounds like the parent is correct and the admin account is wiping itself. The bug is why it decides to do so.

Killzone's controls were laggy, but recent patches have somewhat fixed it. The developer introduced a new 'High Precision' option, which they now enable by default:

When this option is switched on, it makes the analog sticks more responsive to small movements. Turned off, the controls behave exactly as they did before the patch.

http://blog.us.playstation.com/2009/05/27/killzone-2-patch-127-details/

I bought the game on release day and I found it a little frustrating at first - the controls did feel slow and heavy, both for aiming but also for moving. One thing that exacerbated it was that in single-player you would accelerate as you moved, it would take a second or so to get up to full speed so if you changed direction or stopped and started then you would be moving slowly for a while. It wasn't a big deal, but coming from other games like Halo it could feel a little jarring.

A FPS could work quite well on the iPhone, especially if they look at how the Wii Metroid did it. In Metroid you aimed with the pointer and the more you moved the pointer from the middle of the screen the faster it turned in that direction.

You could do the exact same thing with the iPhone, always play with your finger touching the screen, and as you move your finger from the center look in that direction.

If you constrained an iPhone FPS to only allow horizontal camera panning then moving your finger up and down the screen could move you forward and backwards, and movement to the left and right would turn you. Tapping anywhere would shoot (either always in the center of the screen, or the exact point that you tapped).

Alternatively if you use the multitouch you could remove the vertical constraint and look by stroking in any direction and move by stroking with two fingers.

Another option if you don't want to be always touching the screen is to allow you to flick the viewpoint around (sort of like flicking through photos). A stroke to the left (from anywhere on the screen) turns you left, a faster stroke turns faster, and flicking turns really quickly... Continuous turning either by multiple strokes, or have the initial speed of the stroke set the turn speed and if you hold your finger at the end point continue to turn or move at that speed until you release.

I really think there are a lot of options for rather precise control and I think a most game genres could work on the iPhone; determining which control scheme works the best will just require a few demos and some testing.