I got the iPhone 4 on release date. After the first day I noticed that I was getting disconnected from my phone calls or the mute button was enabling itself while it in near my face. I noticed that the screen was turning itself on while I was talking on the phone. The 3Gs I had never had such issues. A day or two after I saw reports here the resetting the settings would resolve the issue. I went one better and wiped the device to factory settings and reconfigured everything manually and not restoring from backup. This fix did not seem to resolve the issue; if anything I feel that it got worse. I went to the local apple store today and presented my problem to the tech. After a few test with his thumb, we found that the sensor worked fine while holding your finger to it, but would sometimes not disable the screen if he put his finger over the sensor slowly. Without a discussion, he replaced the phone with a new unit. Right off the bat I noticed a design change. On the old iphone4, you could not see the sensors behind the glass in bright light conditions like you could on the 3G. The replacement unit has a sensor that is visible in most lighting conditions, but not noticeable unless you know it is there. It looks like the sensor issue with my original iphone4 was that the black glass covering it was too tinted and didn't allow enough light to pass, thus causing the sensor to not be reliable. The new unit seems to have a slight design change that allows more light to pass (or RF, I dont know how the sensor works). On another note that I am sure to be asked about; the antenna issue. My old unit did appear to have the antenna issue that has been discussed at length in the NEWS and on tech sites. If I were at home for example, the bars would go down a minimum of two if I were to bridge the gap in the lower left. At work I didn't seem to have the issue, but I think it is because my office is near a cell tower. Do I have the issue with the new replacement unit?? Yes, it still appears to be present and not changed at all. That isn't to say that I have a problem with the iphone4, I hold the phone in a way that doesn't bridge the antennas so I don't have an issue, but I am sure others do. PS, they may have moved the prox sensor also. The apple tech said that the sensor is to the left of the speaker. The new unit has a visible sensor above the speaker in the center. The tech may have been wrong as to the placement. PPS, The apple tech said that it is the first he has delt with or heard of this issue, but his testing procedure for the sensor seems to have a process which he was following so I am sure a memo is sitting in the break room.