I just updated my iPhone to version 3.0. It was quick and painless, although my jailbreak and carrier unlock have been removed by it. Fortunately the iPhone Dev Team crew are promising to release their jailbreak tools for 3.0 tonight, and unlock tools (called Ultrasn0w :)) on Friday.
I don’t need the unlock since I’m on an O2 SIM anyway, but its always nice to keep one’s options open… and to use cheap foreign SIM cards when roaming.
I particularly like the new spotlight search, which will search the entire phone (including emails, music tracks, podcasts, contacts, etc) for content matching your keywords. See the screenshot below for example.

Also, some long overdue features that should have been present from day 1, such as MMS messaging and copy & paste finally arrived. Its free it seems to have come with no performance penalty, although I have read about a few people on boards.ie experiencing difficulty performing the upgrade and having to wipe and restore their devices.
I still recommend it. This update is available to iPod Touch users as well but Apple will charge you for it
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