I've got an iPhone with the bottom of the touchscreen non-responsive. Every inch works except around 1.5CM at the bottom of the screen (about the height of the dock).
I've tried 2 separate display assemblies, both with the same results, leading me to believe that it's not a screen problem. The funny thing is that it keeps up with the same behavior after a restore.
I've pwned up to 2.2 with no change.
The history of this phone is a bit of a mystery, but I know that when I got it, it was at 1.1.3, with an unknown unlock/jailbreak on it.