Recently I came across the following web site that provides you information and a template for converting a usual SIM card to Micro-SIM. The most important is that the Do it Yourself Instructions (DYI) are quite easy and simple:
1. Download template from this link: MicroSIM template
2. Print it in 1:1 scale on A4 paper.
3. Follow instructions from template.
4. Watch the following video for detailed process.
It has been reported that the new iPhone 4 loses its reception signal when you hold it in your hand. The following video is a good demo of this issue.