On the iPhone, in the top left corner, there is a signal bar for cell phone service. This ranges from 1-5 bars, and will have AT&T right next to it. No bars will show you a "No Service" message.
Next to this interface, you will have an E or a 3G symbol, depending on whether the iPhone can find these services (this isn't part of the AT&T phone service). These won't show up obviously with a "No Service" message, but sometimes, they may not even show up with 1-2 bars.
If you are getting another symbol, with curved lines going from top to bottom, top being longer than the bottom lines, this is the WiFi signal. It replaces E and 3G, because it's faster than E and 3G, and you have no need for those services when connected to WiFi.
Hope this clears up all confusion.