I used to have severe WiFi signal and connection problems two years ago. My MacBook would run slow, and throw errors at me in Network Utility all the time. At one point, I wondered what stationary objects in my home could have been causing any interference that could have been contributing to my problems. I scoured the place for whatever may have been problematic; I tried moving some AV receivers and transmitters around (for my TVs), moving the router to different rooms, among other things. At one point, I had given up a lot hope to find a solution to my wireless troubles. I then noticed my old Pentium III HP Desktop sitting in the room. I had installed a wireless card into it three years ago, but since I got my MacBook Pro, it became obsolete. I had it unplugged too. Nevertheless, I tried removing the antenna to the wireless card, and I think I even tried removing it from the computer. Around the same time, my MacBook experienced a slight increase in network performance and a small decline of errors. I thought I had found the problem! But of course, removing an antenna to a wireless card in an old machine that has no power sounds extremely stupid, does it not? Of course, the next day, my problems returned to haunt me.
My point is, you are making this claim that seems unrealistic. If your iPhone has signal fluctuations, it is most likely because (a) AT&T has extremely unreliable service in your area or (b) your area is coated in wireless traffic and interference. You'd be surprised how much computing electronics can affect iPhones. My 3G can hardly receive decent service if all of my equipment is on and talking to the router in the same room; I can go the other side of the house and have normal signals, but I get no bars on 3G in my tech room.
I would assume the antenna in the iPhone would be near the top of the device, but I can't say for sure. That's just common sense. I can't help but say I think you are overreacting here. Unless the bars are dropping from 5 to 0 bars in under a second and continue to do so repeatedly (as if you were turning a volume dial up and down continuously), I would think your phone is working fine. Otherwise, take it to your nearest Apple Store and have them look at it. Holding the phone up higher will probably net it a better signal anywhere, but here, my iPhone gets the same, consistent signals that I'm used to no matter where I put it. I think you need to reevaluate what's going on with your phone.
I don't if this applies to the 3G model as well but I have discovered what appears to be a very fundamental design flaw. Ever since I bought the 3GS I noticed that the signal strength fluctuated, frequently fluctuating between a full 5 bars and a 1 bar or nothing. I tried to find the answer to this problem on various forums with some weird explanations like attaching a USB cable or a scotch tape to the sim. Nothing I tried improved this. I noticed that it seems to drop just when you made a call and recovered immediately after the call.
This made me wonder if it had anything to do with how the phone was being held. Some users were saying that two identical units would report different signal strengths at the same location in the same network.
Anyway after a lot of experimenting I discovered that the iPhone 3GS appears to be extremely sensitive to being held on the lower 1/3rd part of the handset. Holding the phone in the top half recovers a full signal within a few seconds (15/20 secs)!!!!
You can try this yourself. Putting the phone down on the table or picking it ensuring the bottom half remains uncovered seems to work. Covering the bottom half starts to drop the signal.
The design flaw is that the receiving antenna should be placed at the top of the phone which is least likely to be covered when held. Either way it's a flaw that Apple should recognize and fix. Other handhelds don't seem to suffer from this characteristic.