I have the older iPhone 3GS and the software update "corrected" the signal strength indicator. Seems like my signal strength went down and was not as great as I once though it was!
I'll have to try Radar Now myself, thanks for mentioning it. I use the Weather Channel app pretty frequently myself, much better then the standard Weather app that comes with the iPhone.
From what I'm reading it sounds as if holding it wrong is causing a problem with the antenna. However, what's weird is they are acknowledging that it may be a software fix that could take care of the issue. Pretty strange. Even the CEO is sort of acknowledging the issue too.