Ok, I started experiencing this myself just today after having my phone for about 2 months. While it was sitting on my desk it would jump from 4 bars to zero, to 3, to no service...without me not having moved it an inch. So I tried moving around and just kept an eye on it all day. It kept doing the same erratic behavior, regardless of where it was.
So I started trying to figure out what could have made it go crazy overnight for no reason. The only thing that was different about today was that I had it out of its case all day. I bought the case at the AT&T store the same day I'd bought the iPhone - nothing fancy, just the generic 'leather' case that comes with a screen protector and a spot in the back where you can screw in a rivet and use the belt clip. I think it was like 20 bucks. So I've had it in there since literally the first time I used the phone.
Last night I was at a friends place, and he was looking at the phone and for some reason took the case off. I didn't even notice till I got home. Didn't think it was a big deal, I would just pick it up next time I was over there. Then, soon as I get up this morning the things signal is going haywire and kept it up all day.
So I was pretty frustrated by the end of the day, and decided to just go pickup the case, cause it seemed odd that the first time I'm using it without the case is also the first time its signal strength is erratic.
So I got to my friends house and check the phone - 0 bars. The moment - hell, the instant, I slid that iPhone back into the case the signal strength went back to 4 and hasn't changed. Even though its in the same spot on my desk where it was getting "no signal" messages for hours earlier in the day.
Right now, as I type this, I removed it from the case and started a timer. After about 5 seconds 2 bars went down, and a sec last one came back. After 1 min 6.4 seconds of being out of its cheap, unremarkable case, it hit 0 bars. Putting it back in - 36 seconds later, i'm back at full signal strength and full WiFi strenght (which was 1/2 out of case).
So call me crazy, but this little black case doubles my iPhones signal strength. Doubles it! Every single time.
I wish I knew someone with an IPhone, so we could try it on another phone, but I don't.
This is the case I have. Most AT&T stores have them.
I hope this helps some of you guys who are suffering form the "Signal at full power one min, now 1 bar...now 'no service'.
If someone goes out and gets on of those cases to try this, someone times you have to hit the little sleeper button the top once you've placed it back in the case.