Apple today released an update to iOS 4 for the iPhone 3g, 3gs, and iPhone 4. The iOS 4.0.1 update tweaks the way it displays cell signal strength, as Apple stated it would in the open letter the company posted earlier this month.
The iOS 4.0.1 update--not to be confused with the upcoming iOS 4.1--won't improve signal strength, but help display it more accurately. Apple stated in its letter that the formula it was using would often display two more bars than it should have, and that this is part of the reason why users have noticed a significant drop in bars when holding the iPhone 4 in the so-called "death grip."
One blog has an infographic that shows how bars translated to signal strength in iOS 4.0 and earlier--the five-bar range is abnormally large. Apple says this update will use "AT&T's recently recommended formula for calculating how many bars to display for a given signal strength."