I live in Northern VA and work in Northwest DC. I've never had any problems in VA, but the signal strength in DC is all over the place.
When I first got the 3G, I was dropping calls all the time at work (same 3G switch to EDGE problems). It was so frustrating because my gen 1 iPhone never dropped calls. So I turned 3G off for about a week and not once had a dropped call. The next week, I turned 3G back on and on the very same day, two back to back dropped calls.
I called AT&T, notified them of the problem, and expressed my disappointment of upgrading to the iPhone 3G but couldn't actually USE the 3G as I had to keep 3G off just to make the phone work. They credited my account $60 (additional $10/mo charge for iPhone 3G data plan vs. gen 1 iPhone data plan for six months), and I just kept it on EDGE for the next few months. AT&T also acknowledged the problem, said they were working on the issue, and that it would improve in the near future. My thoughts were: I'll believe it when I see it.
A few months later, I started turning 3G back on just to see if there had been any changes, and I noticed an improvement in signal strength. Call quality is still not all that great where I work, but I'm not dropping calls anymore (actually, I can't even remember the last time I did experience a dropped call).
So, in the year I've had the phone, first three months I had 3G off, last nine months I've had 3G on. Downtown DC, no issues at all. Same signal strength and quality as my house. YMMV.