Dropped Calls and no G3 on ATT this Known issue iPhone 3G

Hello All
I just purchased an iPhone and switched from Verizon to AT&T. Since I have switched, I have hardly had a chance to even use it. I make a call and it drops. I get a high pitched wining sound and it drops. I talked with AT&T tech support today and they said it was a Known issue that is being worked on for calls being dropped when switched on to the G3 network. I switched off and it is just as bad. I will have 5 bars in one place and without moving it goes to 0 bars and then drops the calls. AT&T said they would follow up and send someone out to also check the cell towers (uh huh). I live in the Napa Valley north of SF, CA. The tech support said my call coverage should be Excellent and not have issues. I got them to at least credit me for the Data charges of $30 since I cannot use and have to keep G3 turned off. Is anyone else experiencing this? is it the iPhone/software? I want to know really what is going on so I dont get caught up in a 2 year contract. I have less than 30 days to get this resolved or at least get some honest answers. Is this just really AT&T and bad service? I had verizon and I loved it. no issues...ever.
Anyone? I would love some input.
Powerbook 12" Aluminum 1 gHz - Love it. Mac OS X (10.4.10) some ipods and an iPhone G3 (for now)