When Apple released the iPhone 4, they had issues with users creating attenuation with the antenas by holding the phone a certain way. i.e. Antennagate.
To "fix" this issue Apple released a software "patch" to "recalculate" how the number of bars were calculated on the iPhone 4 (which carried over to the 4S) so for example it would display 4 bars when it actually had what everyone else says is two bars. To make a long story short they made the phone display more bars than it was getting and they averaged out the number of bars you got so people wouldn't notice that when they held the phone a certain way their bars would instantly drop.
No not really, I am the first on the literal block to get the iPhone 5 and as the early adopter in the neighborhood the neighbors are wondering if they should get one and if they should use AT&T or Verizon and its marginal where I live, so I just want to help my friends and understand whats going on.
3G and LTE are 2 different systems that will display different bars and have different speeds when connected using them.
On Verizon 3G you will get around 1mbps up to 3mbps typical CDMA 3G speeds. With their LTE you can get a up to 60mbps according to some peoples speedtest results posted. Not every place is the same. Depending on your location, network traffic, time, signal strength and many other variables your speeds may vary.
So your 3G bars and LTE signal bars are not the same. They might be similar sometimes but they are different frequencies and celltowers might be in different locations. The 3G tower close and the LTE tower further away and so on.