Jailbreak it and install iBlacklist, it disables the feature that shows the text preview on the screen, you can also mask entries in your address book. A nice feature is that any text sent to your phone that you don't want anyone to see can be hidden completely, anyone searching through your inbox won't find them
It also let's you block phonecalls and texts from people you don't want contacting you. If you 'blacklist' them they can't send you texts or call you, the app auto deletes their text (it can also send them an auto reply) and it will also auto drop their call if they try and phone you.
VERY handy app.
It's only available on jailbroken phones though.