I upgraded from a 3G to a 4, and the extra memory and the much superior camera alone have made it a totally worthwhile upgrade. The change in shape I personally prefer, it’s stronger, I cracked the case on the 3G dropping it and hitting the headphone jack on my leg, the steel frame stops that happening. It’s also better for using as a spirit level…;0)
It’s just an all-round better devise than the 3G. The camera is just so damned good, though, and installing HDR Pro has been a lot of fun playing around with HDR photos; the HDR capability built into the latest iOS update is really too subtle to be very use most of the time. I was down in Clevedon and Weston-Super-Mare today with my phone and my Nikon D60, and I took way more photos with the phone, basically because I can batch upload to Facebook, upload straight to Photobucket and Flickr without needing the laptop.