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has any other 3G owners notice this?
Yes. My 3G became unusable, half of the time. Typing a text message became a difficult task. Not only did it take 30 seconds just to open the SMS app, pressing a character would cause the phone to lock up for a few seconds, leaving the character in its pressed state. Please note, this wasn't constant though, it did work half of the time. Overall upgrading to 4 seemed to be a huge burden on the phone for whatever reason.

I've since upgraded to an iPhone 4 which is fantastic.

I also had to reinstall iOS4 after the first install - my phone slowed to a crawl and I still notice the issues with email that you've mentioned. It's not really worth the update, as all you end up with is a slower OS with folders.
After upgrading to 4.0 my phone was pretty laggy. Some apps were worse than others. Maps was almost useless, would hang for 20 seconds while not responding to touches.

However, 4.0.1 seems to have fixed most of the lag issues. In fact, I think 4.0.1 runs better than the 3.2 I had before upgrading.

I haven't encountered any bugs, but I do experience the random hangs + general slowness, and it's awful.

It seems like Apple was lazy and didn't test properly on older hardware (or perhaps didn't focus as much as they should have on, "is this user experience good?" on older hardware).

I can attest to this. My iPhone 3G user experience is atrocious on iOS4. Things are very, very choppy and I spend a lot of time waiting for things to load. Actions as simple as hitting a key while typing a text message can cause the phone to lock up for several seconds.

iOS4 should never have been pushed to the iPhone 3G. I would expect better quality from a public alpha. Best case scenario, realistically, would be for Apple to allow 3G users to downgrade back to 3.x. I doubt that Apple is going to bother optimizing iOS4 for legacy hardware.

Unfortunately, I've still got about 8 months on my contract until I can adopt an Android device.

I've posted about my problems with iOS 4 here previously. The 4.01 upgrade failed miserably yesterday and after a default restore and then resync it seems to be much better on 4.01 than it was with the initial 4.0 release. It's still not nearly as usable as it was with the 3.x OS.
Thanks for the feedback everyone. I should have never updated, and the work to downgrade is not worth it
I avoid using my phone for anything other than phone since "upgrading". At first I thought it was just the developer build, but no. It's just unusable.
Same here. I tend to avoid using it for just about anything. Thankfully, my girlfriend didn't upgrade hers when I did, so between the two of us we still have one usable phone until the iPhone 4 hits Canada.

         |  Original iPhone  |                 | 
         |  iPhone 3G        |  iPhone 3G S    |  iPhone 4
    -----+-------------------+-----------------+---------------
    CPU: |  412MHz ARM 11    |  600MHz ARM 11  |  1 GHz Apple A4
    RAM: |  128 MB           |  256 MB         |  512 MB
My experience with iOS4 mirrors this. Being jailbroken, I have a few tools at hand to help avoid the "reboot once a day" approach a few other folks I know have resorted to, but I'm still finding the hardware significantly less usable than the previous release (for very little improvement in user experience).

I'm holding out hope for Android development to save the iPhone 3G (and 2G, for that matter). http://www.idroidproject.org/ No really, I'm quite serious. Froyo runs acceptably on my 3G right now, but it's missing a considerable amount of hardware support (specifically the PMU, which pretty much makes it impossible to use it productively right now, even for geeks).

Apple have failed really badly on this. I'm hesitant to upgrade any of my devices again - all this is going to result in is more version fragmentation.

They need to provide a way to downgrade, my iphone is ruined.

I saw a link somewhere on HN yesterday that suggested you turn off Spotlight (Settings > General > Home Button > Spotlight Search) to improve performance.

I turned off Spotlight for everything except Applications, and I've experienced a slight improvement after rebooting. Since upgrading to 4.0.1 with Spotlight turned off, performance is --much-- better.

will try this and report back
Just as an example of how bad it was before I made these changes, the simple task of unlocking the phone was a nightmare.

I'd be tapping in my code, and it would take a good 10 seconds before -some- of the digits popped up. After doing the spotlight change yesterday afternoon and upgrading overnight, there is no lag unlocking my phone. Some of the apps still load a little slow for my liking, but that urge to slam the phone on the ground and stomp on it has subsided.

iOS4 was horribly slow for me, until I jailbroke and enabled multitasking (NOT the background - this slows things down a lot)... Multitasking made stuff a bit snappier again, until you have too many apps open, then you have to manually kill them for some reason. This is weird, since normally these apps should have been suspended to disk? Maybe it has to do with the cache-size of apps that stay in memory, which is a bit too big to fit in the 3G's 128mb RAM?

This could also improve things: doing a hard reboot (holding home + lock until it reboots - don't slide to power off) and when +- 15 seconds in the reboot process (with the apple on the screen), hard reboot again. I saw someone suggest that this would clear all saved app states and speed up things too. Not sure if this is true, I jailbroke my phone too quickly after that to be sure this would have helped somethings.

I do know that multitasking clearly enables you to access applications that you use a lot a lot quicker. I usually keep my phone & messages apps open at all time, and kill the rest.