There was a lot of speculation and hope that iOS 4.1 would help fix the dreadfully slow speed of iOS 4 on iPhone 3G. Well, it did. Having installed iOS 4.1 on an older iPhone 3G I can confirm that speed is significantly improved over iOS 4.0 and performance is noticeably better.
If you have a slow iPhone 3G running iOS 4, do yourself a favor and upgrade to iOS 4.1! You can download iOS 4.1 now and is highly recommended. To really get the most out of your older phone, combine the software update with disabling Spotlight and clearing out unused/old apps. This combination really does the most to boost performance of the 3G.
While iOS 4.1 is much faster than iOS 4.0, performance is still not as fast as iOS 3.1.3. If you still have an older OS version installed on your iPhone 3G and don’t want folders then I would say don’t bother upgrading at all, there simply aren’t that many essential features in iOS 4 that the 3G can really take advantage of anyway.