You hold your iPhone a certain way and poof! There goes your reception. According to Apple Insider, the issue may not be hardware-related but rather a software quirk:
Readers report that Apple's tech support forums originally confirmed that a iOS 4.0.1 software fix addressing the issue would ship early next week (as early as Monday), before the comments were subsequently taken down along with all the other related discussion about the matter.
The fix is expected to address a issue in iOS 4 related to radio frequency calibration of the baseband. Readers who saw the original forum discussions say that the issue is believed to occur when switching frequencies; because the lag is allegedly not calibrated correctly, it results in the device reporting "no service" rather than switching to the frequency with the best signal to noise ratio.
iOS 4 introduced some enhancements to how the baseband selects which frequencies to use, so it makes sense that the error may have crept into those changes. Additionally, this explains why iOS 4 has also caused similar problems for iPhone 3GS users.
An iOS update Monday - or during next week - would be far sooner than the norm for Apple, but based on the overwhelming user complaints would be understandable and necessary if the issues are really software-based. [Apple Insider]