I live in So Cal and had zero problems with ATT/iPhone...no dropped calls and almost always 5 bars of 3G...must be a regional thing...
I'm in upstate NY, in the Ithaca area. AT&T coverage sucks here. I have friends with iPhones and they just don't cut the mustard, nor do any other phones with AT&T. Verizon, OTOH, is all over and powerful here. So yeah, regional.