It turns out that New Yorker's frequent complaints about AT&T's iPhone service aren't unfounded. Some dude sent Gizmodo his Genius Bar adventure - he thought he had a faulty iPhone.
His iPhone was dropping calls left and right ("over 30%") so he brought it in to the Apple Store to have it evaluated. The Apple technician ran some tests and found that his drop rate was "only" 22%. That is apparantly a better than average result for iPhones in New York City.
Conclusion?
"The problem is consistent with the service provided by AT&T." Have fun