I have a 2G iPhone with OSes 1, 2 and 3 and yes, call quality is pretty bad - on par with a mediocre featurephone and certainly far worse than top-notch phones like the BlackBerry.

One thing iPhone fanboys can't understand is that the iPhone isn't the best at everything. It's got great internet, multimedia and games (and apps, if you use those), but if you're looking for a phone or messaging devices, other phones will serve you better.