iOS4 and iOS4-compatible apps run very slow on my 3G, even with Spotlight turned off. Apps crash all the time including Safari. I've lost calls because of the phone bogging down at various times. That's just the top of my list.
Is it jailbroken? I have a 3G as well. Upgrading to 4.2.1 I enabled the multitasking switch but it made the phone unusable and unstable. Disabling multitasking got the phone back on track (I did lose Airprint). But the phone only occasionally bogs down and never drops a call (I know, hard to believe for an iPhone).