I bought my iPhone second hand also. I just rest the basic like touchscreen, speaker, wifi, edge connection, camera and the condition of all buttons. If you are not sure just ask the seller the way to do it. Of course, call in and out, vibrate should to test also.

That's what I do when I get my phone. Because iPhone has no warranty even 2nd hand or new one so better be very sure

well, I did restore my phone few days later as some software is not properly deleted. When I got my iPhone I only have 23mb or so. But when I restore and install apps that I want... I still have 65mb. Well the apps is available in the installer so no need to be afraid if restore.