All of the very witty and sarcastic posts put aside for a second, a few thoughts...
I believe it is possible to overcome hardware limitations and issues with software updates. Anyone who doesn't should take a close look at even more complicated hardware snafu's (i.e. Hubble Telescope for example) to see how software engineers can overcome physical mistakes and make an otherwise flawed device live up to it's intended goal. It might not happen at the snap of a finger, but they'll get it right.
Having had iPhone's since day 1, I have always believed that there was something fishy about how the iPhone communicated with cell towers. There have been ridiculous fluctuations in signal strength metering- going from 5 bars to no bars while standing in the same location- from day 1. Also, the iPhone dropping calls in 3-4 bar range while other phones on the same network reported less bars (2-3) and were able to make calls consistently. This sort of stuff has been happening across all models, since the very beginning. How else to explain my 3GS and original iPhone consistently dropping calls in my house standing 10 feet away from my AT&T micro cell? this issue in particular has been exacerbated since updating to iOS4.
There are WAY to many variables to begin to understand why this is, (battery management, safe signal limitations, network parity, etc etc).
In my opinion, I think iOS4 is as much a culprit here, (or at least has opened a pandoras box) as the hardware issue- again, a hardware issue which I think is very real, but can be managed.
I'm looking forward to the press conference. Up until now, they've just danced around the issues.....They need to hit a home run here and first, at the very least, acknowledge some culpability; so that we can put some faith in their ability to fix it.