The utility is called Field Test, and it is accessed by dialing *3001#12345#* (followed by the “Call” button). When you do that, a blank “page” launches with a title bar that reads “Field Test,” along with a Refresh button, as you can see in the image below. The Field Test part is that your signal bars will be replaced with a negative number that measures signal strength as expressed in decibels of noise in the signal.
To that end, the higher the number, the stronger the signal. -80db would represent a stronger signal than -90db, and -102db would be worse still (for instance, this reporter has particularly foul coverage at his office). TMO staff around the country found signal strengths ranging from -82db to about -120db, with any number lower than that representing little or no practical signal.
From user posts at Gizmodo, which first noted the return of Field Test, any Field Test near -70db represents something close to full signal strength. One staff member with an AT&T 3G Microcell got a measurement of -67db from one meter away from his microcell.
Pressing the Home button on your iPhone will end the Field Test and return your display to normal. Locking your phone (or allowing it to self-lock) with the Field Test still running will leave the Field Test numbers in your menu bar until you come back and quit the app via the Home button.
Field Test in iOS 4.1 on iPhone 4 in area with poor coverage