*sigh* I was totally going to listen to you guy's advice and stay back, but while updating some things in cydia my iphone got stuck on its boot sequence, it wouldn't go past the apple logo. seemed my only choice was to update to the new firmware, whether I wanted to or not. Since I lost all my jailbroken apps anyway I figured I might as well anyway.
jailbroke with jailbreakme, which was surprisingly painless. So far my main complaint is the text lag. I have turned off the spotlight search on everything since I heard it can help. no difference so far though.
I would say do NOT upgrade to iOS4. Granted, you get folders and the email is different, but I would say neither are worth how sluggish it made my 3G.. I did not know you could restore back to 3.1.3 and I would if I weren't getting an iPhone 4 today