I'm the first to admit that I like, love even, Apple products.
I have to look on at the issues with the iPhone 4 with a degree of amusement. It's true that any phone's RF performance is going to be affected by being held. And it's also true that no standards exist for the display of signal bars on phones and all the phone manufacturer's have played games with the algorithms, whether for internal marketing reasons or because of customers comparing signal indications and inferring phone performance from them. So I perfectly understand the dilemma Apple have got themselves into.
But only Apple could make this blatant attempt at winning the reality distortion field world record:
Apple said yesterday it was 'stunned' to learn the signal strength graph on every iPhone made is not accurate, and is displaying much better reception than the phone is really getting. To fix it, Apple is going to recalibrate the display, essentially giving you fewer bars in more places.
Update: Taiwanese News recreates recent events: