I happened by a mirror while talking on the iPhone 4 last night and saw my screen lighting up, turning off and lighting up again erratically. I observed the behavior, worst when holding the phone in my left hand, for the duration of the call. I was more than a little irritated, as this was a feature since the first iPhone and, at the time, a big deal
Users are reporting buttons being hit as well, which is even worse if you use your iPhone for, you know, a phone. I'm hoping the next OS update will fix it, but in the meantime, let us know in the poll below if your iPhone 4 isn't registering the side of your face during a call.