The problem is known as the 'death grip'. The signal strength would drop significantly when you're holding your iPhone in a particular way.
According to Jobs it's mostly the left bottom side that's forming a problem, at a point where two metal parts converge which act as a antenna. The official statement:
"Gripping any mobile phone will result in some attenuation of its antenna performance, with certain places being worse than others depending on the placement of the antennas. This is a fact of life for every wireless phone. If you ever experience this on your iPhone 4, avoid gripping it in the lower left corner in a way that covers both sides of the black strip in the metal band, or simply use one of many available cases."
The fact is, all phones suffer from this problem. However none in this degree, and certainly normal phones aren't designed so that you can't hold both ends.
What? Is that an Epic Fail I hear? Yes, yes it is.