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The 3G doesn't run iOS 4 very well. I have experienced very poor performance with my 3G once I "upgraded" to iOS 4. However I have found a couple of ways to improve performance.
First turn off spotlight search (who uses it anyways right). Go to settings, general, home button, spotlight, then untick everything. This gains a fair bit of speed.
The other thing I did was a DFU restore. This is like a normal restore but resets the firmware and is more of a clean install. To do this connect to itunes and sync/backup. Then hold down the power button and the home button for 10 secs. Then release only the power button for another 10 secs, then release the home button. The iphone screen should stay blank and you should get a pop up in itunes (if you get any other result reset and try again). Follow the prompts to do a restore and update. Then sync, and your phone should be back to how it was but running faster.
Doing this procedure has made my 3G work as fast as it used to on iOS 3.2. However if you still want to downgrade back to iOS 3.2 just do a google search. There are many sites explaining how to do it, its not hard.
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