Not that bad.
I noticed it was ok right after a restore.
But then I loaded up about 8GB's of Apps and music and seemed to struggle and slow down a bunch.
If you used a 3GS or i4 it does feel like a turtle.
Installed it on my old 3G that I gave to my wife and it seems fine (that is to say, it's slow, but not any slower than it was before). I did a restore and set it up as a new phone, FWIW.