Here is an update on my iPhone 3G and it's propensity to drop calls. This past Saturday, I made an appointment to see the Genius at my local Apple Store. I told him my story about my phone's inability to hand-off calls to the GSM network when the 3G signal was weak, and the subsequent dropped calls. He immediately asked if it was ok if they did a "Behavior Analysis" on my phone. I said go for it, so he plugged it into his Mac and in a few moments told me that I was having a little over 10% dropped calls. I told him that the 10% figure was probably artificially low, because I have had 3G turned off lately, so that I could conduct business uninterrupted while in my car. He said even 10% was high, so they would give me a new phone.
He removed my SIM card and opened a replacement unit, which was a "Service Exchange" unit (white box, no accessories or SIM card). I asked if it was brand new, and he insisted that it was because there has not been enough time since launch day to recondition and send out refurbished phones. He said
eventually those would be refurbs though.
On my way home I decided to test the new phone, so I started a phone call while in 3G service and then drove home via the same route that I normally commute (which previously had always included 2-3 dropped calls during the 15 min commute). I was shocked that I did not drop the call the entire way home! Since then I have traveled the same route several times while on calls and still have not dropped a call. I have even watched my phone switch over to GSM while on a call!
So in my opinion, the problem was with the hardware (my original iPhone). I really feel that there are issues with either the 3G chip itself or the antenna. For those who care, here is the build info for my original iPhone and the replacement unit:
Original iPhone purchased on 7-11-08: Build week = 28
Replacement iPhone on 8-2-08: Build week = 30
So if you are having dropped calls and improper hand off from 3G to GSM, I would highly recommend that you do two things:
1) Leave your phone on 3G so that it can record as many dropped calls as possible in it's "Behavior" report. That way, the Genius will not be able to dispute your claim (conversely, you can't lie about numbers of dropped calls either).
2) Go get a replacement unit, and continue to do so until you get a good phone.