In actual fact, the update merely recalibrates the way the phone displays its signal bars, and makes the bars a bit taller so they're easier to see. Whereas previous versions showed a full five bars, despite only a mediocre signal, the new version now more accurately portrays the accepted maximum (that you'd get if you stood next to a tower) and the minimum signal level before a call is dropped, and has a more linear drop off in bars as it loses signal.
So not a fix of the actual problem, whereby holding the phone in a certain way causes it to drop signal strength. However, Apple's theory is that now you can see a truer representation of your signal strength in the first instance, you will realise that the reason you're dropping calls is largely that you're just in a rubbish signal area in the first place. Whereas the drop in signal strength from holding it in the so callsed death grip is only a small part of the problem. As you can see from the picture above, the signal on our phone did seem to drop by one bar but then our phone did seem to be accurately reporting a fairly poor reception i nthe first place.
The new update is available immediately through iTunes and is compatible with iPhone 3G, iPhone 3GS, and iPhone 4. As per usual, you'll have to wait a while as you need to download the full 180MB firmware, despite only being a tiny update.
Of course, we await tomorrows announcement for any further developments with regards the company actually physically fixing the issue, recalling the phone, providing free bumpers, or offering refunds. None of which we actually expect to happen.