Yes, that is obviously the cause. However the question remains why it did not happen on iOS3.
I tested it today with my better half's 3G (running OS 3.1.3) and completely encompasing the bottom half of the phone in my sweaty hands causes it to drop as much signal as if I completely emcompass the bottom half of my iPhone 4 (which, surprisingly, is running iOS4). Neither of these causes me to lose all signal, drop calls, cause my penis to drop off, or anything else which may be of concern...
I've already said that as far as I'm concerned it doesn't affect me at all. I get a better signal in my house with the iPhone 4 than I ever did with the iPhone 3G or 3GS.
Same here, Mr Feek
It might not drop calls totally but i saw it went from 3G to edge on 3 phones by just holding it. If that's the case then what's the point of 3G? I might as well stick with an old 2G iPhone.
And this is what the software fix is all about. If you have crap signal to start with then attenuation will kill that, but that's not the fault of the phone.
The software fix is about how the OS controls and organises what the hardware is doing (you know, much like software acceleration/control on your home computer). Apple have managed to release a great piece of hardware with some slightly dodgy software. I'm not impressed by that, but I'm not going to demonise them (as many seem to want to do) because they made a mistake.
I agree that the comment which was released on Friday was bloody stupid, but it's not going to put me off, because we're all capable of being muppets on occasion.
This issue (and I don't doubt, or refute that it is an issue for some people) has been blown out of all proportion because of where it has come from. Looking around, even on these forums, and there are just as many people (if not more) saying that it doesn't affect them as there are saying that it does. And as we all know, people are more likely to complain about something than to praise something.
As it stands, for me, I am getting better reception and a better experience with this handset than I've ever had on my 3G. And for the second piece of apple kit I've ever owned (I'm not counting the Acorn Electron and Acorn A3000 from my youth, which were technically apples

) it's made me happy. Not as happy as Win7, but then again Steve Jobs can't always please the Windows die-hards
Fingers crossed it's all sorted in 4.0.1 and everyone can shut the **** up!