One of the more innovative designs of the iPhone 4, at least when we saw it being debuted by Steve Jobs, was that it had its antennas built as part of the external frame. One part of the metal band around the phone would control Wi-Fi while the other one would do cellular-related radio.
It seemed like a great idea to make a giant antenna for better reception, but now that it's on the outside, what happens when you actually touch the phone? Unfortunately, you kill the reception.
This phenomenon is being reported widely by those who have already received their iPhone 4. Gizmodo has compiled a huge list of comments and video clips showing how bare hands or anything that can connect the two antennae will quickly destroy reception.
Interestingly enough, this is the first time that Apple has offered a first party iPhone case solution, which it calls the bumpers. The bumpers are a $29 rubber band that wraps along the metal frame of the phone giving it both protection from drops as well as insulation from the user's hand. If it turns out that a case of some sort is required, then it's a shame that one isn't included with the device.