The iOS 4 update for existing iPhones rolled out yesterday, and not all is going well.
A quick glance through the Apple iPhone support forums sees a lot of people having trouble with back-ups taking hours to complete - some not completing at all, some getting error messages after waiting, some finding data lost after the update. Apple hasn't formally replied yet, and there seems to be no noticeable pattern, some are saying the iPhone 3G is most prone to the update problems, while others with an iPhone 3G (and 3GS) have updated without any trouble.
Best bet? Either block out a lot of free hours before attempting to update, making sure you've backed up everything on your iPhone prior - or just waiting this latest update out for a few more days to see if Apple issues another update.
In other news, it seems that iOS 4 may actually slow down your iPhone 3G instead of speed it up.