I've read various threads and apparently it does work for some people.
I have a motorola droid with the FRG01B build of Android 2.2, and I cannot make a 3 way call. Total BS!
I get one person on the line, hit add call, then dial a number and hit the send/green phone icon. I get a couple seconds of dial tone, then silence. I hit the manage calls button just because it appears (not because I'm actually connected to a second line), and I get a busy signal, can hit it again and get back to the original call. The phone pretends like it's connected to a second line and I can hit manage calls to get back to silence and/or the busy signal. I've tested this a bunch of different times and different ways and it simply won't work.
I called Verizon and they failed miserably and then transferred me to Motorola tech support. The motorola guy asked a few questions, then put me on hold, then hung up and never called back despite having taken down my mobile #.
Apparently this was a known issue for certain regions of the country: (see the 3 way calling section on the 4th page down)
News: OTA Droid Updates coming Dec 11th
If this was a known issue supposed to be fixed on Dec. 11, 2009, how is it possible that it does not work with Android 2.2?
I am in Colorado and read someone else in Denver was complaining about the same problem. Must be one of the unlucky "certain regions."