Don't be so harsh on the OP, everyone has to learn about it sometime. At least he figured it out.
Actually, in a way I think he's got a clearer idea than some of the comments elsewhere that are fixating on attenuation by obstruction of signal. I suspect that all this talk of hands and other body parts blocking the signal is the most minor and least interesting part of this. The bigger issue that is unique to the iPhone is the bridging of that gap.
Where the OP is wrong (I think) is that it's not that it "interrupts the flow of something", it's more that it allows a flow between the two antennae that bridges them to some extent, changes the resonant frequency of the main cell antenna, and detunes the antenna sufficiently to degrade the signal reception. If you think about it then a mm or so of plastic between a hand and the antenna isn't going to do anything to remove that hand from the path of the signal between the cell mast and the phone but it does stop the finger from touching that gap (there might still be some bridging though because there could still be some capacitive effect with the bumper acting as the dialectric).
It will be interesting to see what Apple do in the next hardware revision (in my opinion probably at the next generation at WWDC 2011) to reduce the effect. Coating the area is probably the least good solution because I think there would still be a strong capacative coupling with anything less than a bumper-like covering so short of moving the antennae inside again (and I hope they can avoid that because I love the new form factor) they're left with trying to move the join to a less exposed place or finding some way to dynamically retune the antenna when the gap is bridged.
I think that a lot of people missed the hidden message when Apple showed off their $100m test facilities and I've seen a lot of stupid comments on this forum to the effect that it's no good having expensive test facilities if you don't use them properly; presumeably such posters know more about antenna design and testing than a bunch of Apple engineers who probably have many hundreds of years of cumulative experience in antenna design and testing. The mostly unstated message from Apple showing off that facility (although they did mention PhD count) was "Do you really think that we'd spend $100m on a test facility and then not staff it with some of the best antenna experts in the world?". I'd bet on the fact that Apple have some very smart engineers working for them and the next iPhone will show significant improvements in this area.
As for how Apple got themselves in this situation in the first place, I'm not sure, but I think it crazy to believe that it was because their engineers didn't do something really basic like test it enough in the wild or fail to model, test and analyse the bridging effect. Maybe they genuinely did believe that the performance was close enough to their competitors so as to not cause this furore of press and consumer reaction.
- Julian