OK definitive, mobile phones work at altitude (about the same as they work at most lateral distances from base stations.
The biggest risk in the air (but the vote is not out yet as has already been stated) is from the phone registering with cells and networks (that's the characteristic chattering sound you hear on nearby equipment) which is at a higher power than normal calls and messages.
There are a couple of companies out there who are working on making cell phone technology available on board as the airlines would love to be able to do away with the weight of their fixed onboard phones (and save loads of dosh in fuel savings). Since everyone takes their own phones on board anyway.
The system I am aware of would place a very small cell in each aircraft so that phones would register once and then since it is 'captured' the airline can charge the calls at the usual US$12 per minute.
There are some technicalities to work out, not to mention the approval by various authorities.
