Become a MacRumors Supporter for $50/year with no ads, ability to filter front page stories, and private forums.
Using your t-shirt seems to just smudge the oils around, get yourself a microfiber cloth. I use the one that came with my wrapsol screen protector and works like a charm.
 
I don't have an iPhone 4, but I assume cleaning the screen on an iPhone 4 isn't different from a 3GS.

I don't clean my screen. Its gets finger printy and stuff but i dont mind.
 
My shirt, and not a scratch on the front. I don't think there's any on the back but don't check that often. Much better than my 3G, that thing was in "poor" condition by the time I used it for a year and a half. But my 4 is going strong since launch day (no case, I refuse to buy a great looking phone and then cover it up/make it thicker).
 
Register on MacRumors! This sidebar will go away, and you'll see fewer ads.