My advice, with some users having issues with new updates, turn auto update off in iTunes. Read through here and the Apple Discussion forum about issues with certain updates, and then decide whether you want to update or not. Most iOS update changes the modem firmware, so even if you can downgrade to an older iOS, that modem firmware will stay the same. Some have indicated that issues with their phones are more about the modem firmware causing the problems, than the iOS itself.
Unless someone who already updated to the latest iOS tells you what modem firmware is installed, you won't know unless you update yourself. I have upgraded to the iP4 from the 3GS, it's running 4.1 with 02.10.04 firmware. After my own harrowing experience after updating to 4.0 and three 3GS's later, I got upgraded to the iP4. Which in it's current condition is running perfectly (with the exception of intermittent wifi issues). After reading through posts with people having issues after updating to 4.3, I'm sticking with 4.1 a while longer. Who knows, maybe it will take upgrading to an iP5 to not have these issues anymore.