Apple put the algorithm in place via OS 2.1 update back in '08. http://www.newsoxy.com/technology/apple-iphone/article11156....

If you don't remember, back then every blogger was saying things like "my signal has improved drastically with this update!!11!!1one".

This is what the graphical representation of that update was: http://fscked.co.uk/post/754590440/this-infographic-hopefull...

As you can see, over 50% = 5 bars. AT&T's recommendation = more accuracy and less reality distortion.

Next update, you should see OS 2.1's 3g signal update reversed to what it used to be.