Last week, Apple's Jennifer Bowcock confidently claimed that the iPhone 3G 2.0.2 firmware update had notably "improved communication with 3G networks." It prompted a bit of a spit take in the Boing Boing Drome: if Apple has fixed the 3G problem, why are forum users still raking a claw of frustration across their frustration-contorted rictuses?
As it turns out, though, it looks like Bowcock might have been telling the truth. Roughly Drafted Magazine has an interesting article up, explaining what insiders are saying the problem is with 3G iPhone reception.
Essentially, it's this. There's no problem with the chip or the antenna. However, every time the iPhone sends a 3G request to the tower, it asks the tower to give slightly too much power to the request. Transmitter power is a limited resource, so when a tower is being asked for too much simultaneous 3G power, it starts dropping calls and acting funky due to a lack of downlink power.
So why are people still experiencing problems, even if they've upgraded to 2.0.2? The issue is that if your local tower is still being queried by enough non-2.0.2 iPhone, it is still having power issues. This is why AT&T is text messaging users, encouraging them to upgrade: they can't actully solve the problem for everyone until a critical mass of updaters is reached.
In short, it should continue to get better over time if you're still having problems. The 2.0.2 update has made an improvement, which can be seen on internal data, and will continue to improve reception over time. But it's not an instant fix. Miss Bowcock: we're sorry we doubted you!
The Inside Deets on iPhone 2.0.2 and Dropped Calls [Roughly Drafted]