How is iPhone coverage in New Zealand?

It will work as long as your service provider has service there additional fees will most likely apply for calls and text messages.

hopefully better than it does in AUSTrailia hope you don’t get a $500.00 bill

AT&T coverage in New Zealand
If you plan on using the phone, get Skype so you can use your international data plan for phone calls. If you have unlimited international data as a plan, using Skype for phone calls will not cost you extra save for the subscription to Skype which is not very much compared to the per minute charges you will incur.
If you use the phone straight up, you’ll be taking a bath in international roaming charges. It’s just not worth it to use your phone internationally.
If you do want to use the phone due to poor data coverage, buy the World Traveler add-on plan for $6/month which gives you a discounted phone rate.

Ooooo, when are you coming? What are you planning to do etc? Stopping by Wellington? :D