iOS 4.0 literally slow downed the iPhone 3G but Apple promised that such issues would be fixed in the upcoming iOS 4.2, and so Apple has delivered on that promise by making iOS 4.2 a really responsive update and very beneficial for those of you who still don't want to let go of their precious iPhone 3G's.
The video below shows text entry, web browsing and google maps with street view in all 3 iOS 4.2 does a splendid job, the text lag was finally gone, web browsing is still a BIT laggy (wait for the video to get to the Apple website) but nothing that is too much of a burden for net surfers. and Google Maps text entry has a bit of lag (when entering text) otherwise the zoom in and street view all show very perfectly.
It's good to see that Apple does still care for their old customers (customers who are using older products) not many companies are this generous when it comes to providing the latest version of an OS to an older model of a phone (I am referring to Nokia of course, they always ignore 2009 model phones which are still very buggy and refuse to provide customers with any sort of fix)