"Readers report that Apple's tech support forums originally confirmed that a iOS 4.0.1 software fix addressing the issue would ship early next week (as early as Monday), before the comments were subsequently taken down along with all the other related discussion about the matter.
The fix is expected to address a issue in iOS 4 related to radio frequency calibration of the baseband. Readers who saw the original forum discussions say that the issue is believed to occur when switching frequencies; because the lag is allegedly not calibrated correctly, it results in the device reporting "no service" rather than switching to the frequency with the best signal to noise ratio.
iOS 4 introduced some enhancements to how the baseband selects which frequencies to use, so it makes sense that the error may have crept into those changes. Additionally, this explains why iOS 4 has also caused similar problems for iPhone 3GS users."
Claiming the OS has something to do with this is ludicrous, not only have we not seen people complaining of 3GS over the update but it's also a fact 3GS had poor connectivity and dropped calls to begin with.
We know that the signal indicator only checks the signal strength from time to time so it is very likely they'll do a software trick to stop it from actually displaying correctly.
However, our readers have been worried about high radiation levels. While so far there's probably been no danger, Apple might try to boost the SAR above the allowed values to what is known as dangerous for your health. This represents a greater danger for children than for adults as SAR protection is usually offered by the large amounts of water in our bodies - especially our brains. Children have less and thus you should always check for the lowest SAR when buying your kid a phone!
It's also arguable if the SAR reports will be accurate as Apple has bought off all day one reviews of iPhone 4 and surprisingly none of the reviewers ever found anything wrong with the new iPhone.