As revealed by Apple on July 15, iOS 4.0.1 for iPhone improves the formula to determine how many bars of signal strength to display. Although mainly aimed at the latest-introduced iPhone, the firmware update is to be applied on iPhone 3G, iPhone 3GS, and iPhone 4 devices using iTunes 9.2 or later.
These are the steps to take for downloading and installing iOS 4.0.1 for iPhone:
1- Get the latest version of iTunes to your computer;
2- Launch iTunes and connect your device to your computer;
3- Select your device in the Source List on the left, under Devices;
4- At this point, iTunes should detect that iOS 4.0.1 is available for your “supported” device. If not, hit the “Check for Update” button.
5- iTunes will notify you that a new version of the iPhone operating system is available for download. Accept it by clicking “Download and Install;”
6- Allow iTunes to perform the software update for your device.
Important: do not disconnect your device until the update has finished! You will know that the update has been successfully applied when the device reboots and shows the iOS 4 home screen.
Alternately, owners of a supported device can download the iOS 4.0.1 update / restore IPSW file to their computer and install at a later time. Direct download links from Apple’s servers are available by going here - iOS 4.0.1 IPSW Download Sources.
When are ready to update, users can launch iTunes with their device connected, select their device, click “Restore” with ALT (option key) held down, select the iOS 4 IPSW firmware bundle, and click “Choose.” The installation process will begin, while the same golden rule applies - do not disconnect until the update is finished.