A number of readers have reported an issue where the iPhone generates echoing and background noise on the receiving end of phone calls. Most users reporting this problem describe a situation where "everyone can hear themselves in the background."
Interestingly, the receiving end echo can sometimes be resolved by using the included headset mic, but may result in a situation where the iPhone user instead hears an echo.
Note that this issue has been extant with other phones as well, generally attributed to an issue with the carrier (AT&T in this case) rather than the device. … Read more