Doug's comments have seemed to be getting a lot of flack back and forth from both Apple and posts herein. I must say, so far, I think he "might" be on to something! I tried the following (yesterday), as Doug suggested, and thus far (the verdict is still out) things are working much much better on my 16gb black iPhone.
1) I restored the iPhone to a new phone. (With itunes 7.7.1 there is a bug which will keep popping back up and asking you if you want to restore from backup, even though you already have restored the phone back to its new settings. Be sure to click on the new phone option.) You can resync all your other stuff (music, contacts, etc) later. (I would back things up first just case)
2) I then went home, popped in the new SIM card (which I simply ordered from AT&T by mail, and I had it in 24hrs) reading with the 004, not the 003 ending digits. The SIM card in my iPhone which was purchased on July 12th one day after release, was different. I called AT&T and made sure that they had my IMEI number correct in the system for the new SIM card. They activated the SIM, and within a few minutes things were up and running (like 2 minutes, actually). I should note that in my apartment I was getting 3-4 bars of 3G, where before I was seeing 1-2 at best. Although, I'm not sure how reliable that is, because I AM STILL seeing it fluctuate significantly as I walk around the apartment, away from windows, etc.
3) I live in Seattle, downtown area, which is very well blanketed with the 3G network. I wasn't having as many problems with dropped calls, as others have described the assinine 20 or so dropped in 2 minutes, but I was having some frequent dropped calls. About 4-5 per week, or simply just "call failed" as I'd try to dial a number. What I was experiencing, that was more frustrating for me anyway, was data connection issues (which I've heard less about on this blog ,frankly). I was unable to connect reliably to my email, safari, maps-GPS, etc. I would literally be connected, writing an email, and then hit send, and for whatever reason it would act as if it was sent, the message would not go out, and I'd loose the message entirely. UGH! To get things working, I would have to do a hard reset to get 3G data connection, and the phone wouldn't even switch over to EDGE data. But of course WIFI worked fine at both work and in my apartment.
4) On taking the bus to work (15 minutes to the University of Washington) from downtown/Capitol Hill there is a dead spot on AT and T's network. It has always been a problem for me, with my old Sony Ericson, and my wife's Moto, as well. This morning however, after the restore, and the new SIM the phone switched out of 3G into EDGE while I was surfing the web, and then back to 3G once it was out of the deadspot. I've never seen my phone do this successfully before! So that was great news, or rather "encouraging". Also, since I have restored and added the new SIM, the cannot connect to internet problem is done. My phone has, seemlingly more total bars on average (although it def, still fluctuates from time to time), and is getting data, surfing, at much much better speeds.
5) I'm not sure that my problem is completely resolved. For one, I haven't made enough new calls today to confirm if the phone function is better (i.e. no call drops, and 3G-2.5EDGE switch over). But I can say, that as of 24hrs, this phone with a new SIM, and complete restore is working much nicer, and seems like the iPHONE I was promised.
6) Finally when on the phone with Apple Care (for an unrelated headphone/headset problem with my phone, which turned out to be a bad headset/mic...get a new one if it isn't working folks.), I should note that the man told me something very interesting. He said that the 2.0.1 update works best on some phones with a full restore, (new phone); And that layering the update on top of the old 2.0 won't solve bugs. This was very interesting to me, because when I updated to 0.1 I was shocked that I wasn't getting the "snappiness" that others were reporting. I am confident to say, my phone is snappier now, that I completely restored it.
All in all, I'm not 100% convinced that this is the problem; nor am I sold that this is the solution to the worldwide issues at hand. But I hope, as many do, that this is a network issue, or a Firmware update, and thus a quickly fixable problem. However, if you haven't tried what Doug suggested, I would give it a whirl. I will post in a few days to see how things go from here with my phone.
Good luck everyone! (AND Apple/AT&T, please tell us what is going on!!! We're paying high dollar for this product! Customer Service should be number 1, Give us at least, a heads up!)