IPhone owners that installed the latest update ver 1.0.2 were pleasantly surprised to find their Wifi reception was greatly increased (up to 2 bars). It seems that the update allows the iPhone to connect to a Wifi connection that it would have previously deemed to be "out of range". It's worth noting that Apple makes no claim that Wifi reception will be improved with the installation of the update and as with most of the updates from Apple there are no specifics about what "bug-fixes" are being addressed.
The 3.7MB update is available via iTunes (?check for updates? under the iTunes help menu) and will require owners who have modified their phones to restore them from scratch.