Iphone 4 3G Issues

I have an iPhone 4 with ATT. I go to school in an area that the service is always at 1-3 bars. It switches from no service to E to 3G all the time on most part of the campus.

I noticed that even when I have the 1-3 bars, on 3G, the internet still does not work. It will take too long and time out. I have friend with a 3G iPhone and his works slowly, but it works.

Also, the iPhone starts getting really hot. It seems like the constant switching from E to 3G and going to no service causes a lot of strain on the iPhone. The flash was disabled as it said the iphone needed to "cool down".

Some places on the Campus it does work. It changes from time to time. When I go other places though, the internet works fine. Usually flawlessly above 3 bars.

I am just trying to see if a software restore would help this issue. Since even at 1-3 bars, I should still be able to go on the net, especially if the iPhone 3G can next to me.