iOS4 update ...

[pam123]

If you have a 2G, or later, iPod Touch or an iPhone 3G or 3GS you're compatible.

Here's how to get through it as painlessly as possible.

First, you will want some extra room so a few play lists may have to be removed, you can always add them back later.
Update all your apps and if you have any that give trouble remove them also, they to can be updated and added back later.

If your media back up isn't current then do your back up now.

Now download and install the latest iTunes 9.2 if you haven't done so already and make sure everything runs in iTunes.

Connect your iPod Touch and get the notice about the new update.
Some people just hit Update and Install and nothing bad ever happens to them, others seem to be cursed by the gods.
If you're in the latter group do the download as a separate step.

About how much time the install takes (That includes back up and restore as well) :
On my 2G 16 GB it took about an hour and 10 minutes , that's with 12 GB of data and no very involved apps.
If you have a 32/64 GB model and more stuff or you're playing Avatar or Assassin's Creed it's going to take longer, maybe a lot longer.
Depending on how heavily you use the Touch as a PDA expect more time to be added for that as well.
The install will give you a time estimate before it starts, believe it.
Translation : Don't shut down after 30 minutes because "The install wasn't doing anything. The loading bar was just going back and forth.".

Done?
You'll need to re-enter your pass code and you're good to go.

[zaraly]

I'm actually looking forward to iOS 4 for my iPhone 3g. Even though there still isn't much for the 3g with this update, I'm really excited about the folders you can create with it as I feel it will save so much room and time for my iPhone. Bring on summer!!!
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iPhone iOS 4: Top 9 New Features to Expect