There is still a gap for about 40 miles after Ft. Irwin towards Baker on I-15. However, outside of that gap, it is 3G streaming all the way! I was able to tune into Radio Paradise up the Cajon Pass without a hitch. Starting south of Baker (well before the famous Zzyzx Road), I was able to jam all the way to Las Vegas with only minor breaks a couple times in the deepest parts of the desert. It appears that AT&T is constantly improving their network.
One caveat, (and maybe a minor bit of bragging), you won't get this kind of performance from just any Internet radio app on iPhone. You need one that has a persistent retry mechanism and one that has a high-quality MPEG-4 aacPlus decoder. With those two features, a 24Kbps stream sounds great through your speakers and rides through the bandwidth sags without audible rebuffering. Most of the iPhone apps that claim support for aacPlus (aka HE AAC, AAC+, etc.) use the open source FAAD2 decoder. That decoder has very poor performance and sounds terrible at low bit rates. (Personally, I don't think it even sounds that good at 64Kbps.) Since the Tuner2 iPhone app uses the commercial FhG decoder and the Modulation Index reconnect scheme, the audio quality and reliability are very high.
With all this talk about the desert, I don't want to forget to mention that the app still performs like a champ all around the LA metro area, delivering an experience superior to either satellite or HD Radio. Now that aacPlus is finally starting to show up in iPhone apps, car listening reliability will pass through the critical threshold for a broad audience. Pandora and AOL Radio still use 64Kbps MP3 on the go, so their audio quality in the car is marginal both on the decode and on the bandwidth usage. Once stations start to use 32Kbps MPEG-4 aacPlus, Internet radio in the car will really start to come into its own.