It all depends IMO. I have a 3G and it is nice to have the folders to organize my apps. That by far is the biggest feature of 4.2 that I use on my 3G since I cannot use many of the features in 4.2.
It is still slow to open the iPod at times but other than that I'm ok with 4.2.
I think for me it is time to get an iPhone 4. Not because 4.2 sucks on my 3G more because I want some of the features that 4.2 brings that I cannot use on my 3G.