Gersh, sorry to hear you've had bad experience with the Jawbone  earpieces...honestly, I'm using the Jawbone Icon (white one) to match my  white iphone 4 & it works flawlessly.
I'm using the stock bluetooth firmware that came with the Icon. I'm also  using 4.0.2 on my unlocked iphone 4 & have no issues
My icon can go about 30 feet away before static kicks in. The phone can be in any pocket etc & I have no issues. 
Just the other day I left the phone in the car running, hopped out to  check the mail on the mailbox & came back to the car talking to my  fiance & she had no idea I grabbed the mail before I came home.
Maybe your bluetooth is defective? I would exchange it for another one  or worst case, try another iphone & bluetooth, pair them & see  how they work together.
As for me, you guys are probably wondering what I'm doing back here  since I praised the Platronics Explorer 360 a few months ago...well I  lost it after my engagement party & wanted a new bluetooth to use. 
I looked for one feverishly in stores & couldn't find one...well I  ended up upgrading to a Jawbone Icon & as you can see I love it.
Here's an update...
I recently picked up some Jabra 925 eargels and swapped out the OEM  Jawbone ones & compared the sound quality in the ear etc.
My only gripe with my Icon is that it wasn't as loud as I wanted it to  be...every other feature worked great. With the new eargels not only  does the sound get amplified...it gets a little clearer as well.
The sensor still sticks to my cheek too so I don't lose that all too important feature...
I highly recommend the Icon for use on the iphone 4. If you want even  clearer sound in your ear & more comfortable fit, grab the 925 ear  gels
FINAL update...I took our old red BlueAnt Z9i out of my fiance's car,  charged it up & tried it out with the 925 eargels & OOOOMMMMGGGG
Its a brand new bluetooth...So loud I have to turn the volume down  ...the call quality is not as clear as the Icon but the volume got its  much needed boost. 
In a total range showdown, the Icon wins hands down. It gave the longest  range indoors @ about 30 feet between rooms in my apartment vs. the Z9i  coming in around 20 feet before I got some static in the reception. 
For noise filtering, the Icon wins hands down! I've driven to work 80MPH  on the highway...windows down & no one knew during a conversation  vs. the Z9i bringing in more background noise even with noise iso max  turned on.
In closing, those ear gels made a noticeable difference. They're worth the extra cost to get them.
If you have an iphone 4 + 100.00 to spare, order both earpieces (Jawbone Icon + BlueAnt Z9i). 
If you have an extra 10 to spare, grab some 925 ear gels and get to know  your two new favorite bluetooth ear pieces. If you're anything like me,  you'll swap them out every other day and enjoy your new electronic toys  lol 
P.S.S
I recently found my Platronics 360 bluetooth earpiece. I can't get mad  about it either...if I never lost it, I would not have had the chance to  have the Icon nor rediscover how my old Z9i sounds again & use it for the first time with an iphone 4.