I was able to update my 16GB 3GS to iOS4 without a hitch, that is until I paired it up with my Contour Design SurfaceSound Compact Bluetooth handsfree car kit. Upon syncing the device would confirm pairing to the phone by announcing "handset connected". However, after updating to iOS4 the device would continually announce "handset connected" every minute or so (quite annoying). I've tried unpairing it to my iPhone and then repairing it but the problem continued. However, I did find a workaround to this problem. I noticed that if I left my iPhone on the Bluetooth screen (within the Settings), the pairing takes place but it doesn't force my car kit from announcing "handset connected" every minute. Aside from not being able to switch to another screen or application, pressing the power button (turn off the display) will bring this "bug" back. At least the iPod functions still work and I can take incoming phone calls...hopefully Apple fixes this annoyance soon.