iPhone sounds muffled to people I talk to

I had same problem. I read on another post it is an issue with Apple's attempt at noise cancelation when making calls when background noise is present. It was suggested to disable noise cancellation by enabling hearing aid mode (under General-->Assesibilty). The only down side is it makes you enable bluetooth and amplifies your handset volume a bit. I tested it with several people and they all noted how much better they could hear and understand me. I had been to 3 Verizon store for help and no one could figure it out ... thank goodness for support communities. Hope this helps.