What would you do iPhone 3GS or 4s?

Ok I got 3GS on contract and if I cancel it I have £240 before I can go on to a iPhone 4s contract or would you just keep your 3GS til September 2013 and my iPhone 3GS on 3 has such a rubbish service it drives me mad i got lost last week and was stuck with no service
I worked out if I sold my 3GS and iPod touch 4 that I don't really use and I've got a older IPod I can use)
what would you do keep 3GS or pay £240 and go on a 4s contract

The 'Phone' is not your problem (not sure why you think it would be… )
Unless it is genuinely faulty - they could exchange it if you can show that other phones on '3' work

Virtually all phones are about the same performance.
certainly iphone 3/3GS and 4S are as good as the same.
The iPhone 4 had a small issue if you held it wrong

(yes, some android designs can be very sensitive, but iPhones are OK)

What is an issue is Your current network in Your current location.
No network is perfect, I can find you locations all over the country where only one (and a different one each time) is able to provide service. - so its not like you say xxx will always be better.

So unless you change from your current network "3" to a (known) better one, you are headed in the wrong direction. It can even be that no network is good where you are (!)

Best plan is to find phones/SIM cards (eg get one cheap PAYG on each network for 5-10 pounds) and test them in your iPhone (if it is unlocked) or Another '3G' phone (any friends with other networks? - that can come around and show you?).

IF you have a good broadband link…
The best option however is that '3' have a in-house Cell to give you perfect coverage at home
a 'FemtoCell' Ask them, they can supply for free, it plugs into your home broadband and uses that to connect - but gives a perfect signal at home.

[OK, does not help in other locations, but great at home! ]

http://www.three.co.uk/homesignal - call us on 333 and select option 3.
Little video of how easy to plug in and setup (nothing basically!)
http://support.three.co.uk/SRVS/CGI-BIN/WEBISAPI.DLL/,/?New, Kb=Mobile, Ts=Mobile, T=CaseDoc, Case=obj(5499) - here

If the signal has always been bad,
why haven't you complained and tried to cancel the contract before?
you always have 7-10 days after you start a contract to cancel (and certainly complain) about coverage?

So you could cancel (and return the phone) if you really felt that '3' was not the right network for the places you need to use it. I have to tell you though, that they share the masts as t-mobile and now Orange, so moving to those networks would not be a better choice.

I wonder, are you expecting too much from your mobile?
eg always in hills and valleys?