Thought I'd post an update on my iPhone saga!
I visited the Apple store on Friday night and basically 'camped' there for 3 hours. Testing the replacement iPhone to its end to see if it would break again. I didn't update to 3.1.2 as I reckon that's the problem in the first place with some versions of the iPhones wi-fi chip revision. Anyway, after all this testing, I finally walked away with a working (And still working now!) iPhone at last! YAY!
I did notice something that was either coincidence or an actual difference on the phones ive had though. The ones where the Wi-Fi stopped working was a slightly lower quality finish to the build and casing. For instance where the camera is on the back, the silver bezel surrounding it was protruding outwards, so when you rubbed your finger over it you could feel it as a sharp metal circle. Also at the bottom the case where speak and microphone it, that was also really quite sharp to touch as well.
My original iPhone didn't have any of these sharp edges, and funny enough the one I've got now also doesn't have them either. So it made me wonder if that's the way to identify the 'newer' batch which have this problem. Its probably nothing of any significance, but i thought it was worth mentioning it.