I updated my 3G to iOS4 and noticed a serious performance hit along the same lines as the original poster. Rebooting the phone brought things back up to speed though, with some functions seeming snappier than they were under 3.x (Safari being the stand-out example). The phone has been running fine over the past couple of days since the reboot, so I'm not sure if there's a problem with how the upgrade is carried out on the phone that causes the slowness, or if there are some memory issues in iOS4 that will necessitate periodic rebooting of 3G models.