As for the signal, it seems as if T-Mobile has been having issues with the network lately. Several people have reported problems the past few days, including me. But it cleared up the next day.
As for the other issue, have you turned it off when it starts to do that? Mine was doing that the other day (sans searching), which is... power cycling, I guess? It does it once in awhile, but it was like it was stuck in a rut the other day. I said forget it and just turned the phone off. When I turned it on, everything was fine.
Not sure if this helps but this is what happened in my instance.
Is the phone unlocked? I know that the Wal-Mart family plans run off the T-Mobile, but there can be registration problems as well as APN issues accessing the data and MMS portion of your device. If the device is not unlocked, it might be having issues acutally holding the network connection and timing out.