After iOS 4 release in June, it was laggy and generally not a good experience for many iPhone 3G users. Nevertheless, the due to release iOS 4.2 is running pretty well on iPhone 3G. Here is a video of iPhone 3G running the iOS 4.2 GM version, which is usually identical to the final release. The video was shot by TIPB.com. There were not any significant lags, and the keyboard was responsive. But, as usual,  the real problems appeared after some usage time , when you bloat the system with all your email, calendar entries, and vast number of contacts.