I think what has happened is:
a) the iPhone 4 has a more erratic antenna design- better in some situations, worse in others, especially when being held, and
b) this did indeed expose the - always known - bogus signal strength display.
Whomever designed or approved an antenna that could be held or put in a configuration where two antennas could be bridged - OR NOT (i.e. the end antenna situation is highly variable) - should have their engineering degree taken away....
I heard on the radio that the problem arose from the requirement that congress made, that the antennae be placed as far away from the face as possible and that many of the other newer phones have the same problem, including NOKIA. Then, yesterday, I read that congress is considering requirement that warning labels be placed on phones, that they might cause cancer.
Then the simple solution is just not to hold the phone while using it....