A few days ago, Apple released iOS 4.3 beta 1 to developers. It appears iOS 4.3 will not be available for iPhone 3G and iPod touch 2G. Both devices are not listed on the iOS developer website.
This indicates that the final iOS built for iPhone 3G and iPod touch may be iOS 4.2.1. iPhone 3G has an older processor and has always been slow to run on iOS 4.x. There was a slight increased in speed and performance on iOS 4.2.1 but as the iOS becomes more sophisticated and complex, iPhone 3G will not be able to handle the any iOS beyond 4.2.1.