Think I responded to a q in another thread – but yes, software is upgradeable to iOS4.1 – which is what I have, and makes the 3g fast again (unlike OS4.0 which made it very slow!).
It’s very very similar to the 3GS, just a little slower and you can’t multi task (have more than one app open at once). The 3G cam doesn’t have autofocus, whereas the 3gs does. Iphone 4 adds video, a flash to the cam and a better cam, much higher screen res.
3g battery life is fine for a smartphone. I use a lot and need to charge every day, though if i switch 3g, wifi, gps etc… off, and just use it for a phone/text, I can get 2-3 days from it.
I have a 3g, contract is up in a couple of weeks, and i’m keeping it and going SIM only. don’t see the point in upgrading yet, except for something ‘different’. Maybe iPhone 5… 🙂