In general, when you are about to purchase a memory-intensive App such as Sims 3, you should always download it from your COMPUTER and then sync it to your iPhone/iPod. Downloading these Apps straight from your iPhone have caused a lot of crashing errors.
My Sims3 has played super smoothly and has only crashed once. (and I've been playing it at least an hour/day since it was released in the App Store) I think it crashed because I was playing it while also listening to music. When I turned off my song, I no longer experienced that problem.
This game is very polished and probably the best game I've played on the iPhone thus far. You can slide your finger across the screen to roam around the world and there is no lag. The loading screens only occur when you need to travel to and from town and those last about 5 seconds.
Not sure what the game will be like when running on the iPhone 3.0 software, but I'm assuming EA will release a patch after 3.0 comes out to enable the new game features. (or those features may already be in the current game and will be enabled once it detects the 3.0 software)
Anyways, I definitely recommend this game. It's not as buggy as the App Store reviews say. (I'm assuming most of the reviewers downloaded straight from their phone or didn't do a proper reset - which EA states on the download page)