Be advised that iPhone 4 has issues with the screen if dropped. I have an iPhone 3G that has been dropped several times (slippery little sucker) and have zero screen damage. iPhone 4 NEEDS the Apple supplied case so your hand doesn't mask the antenna and affect signal strength and to give some protection against screen damage.
You can Google iphone 4 screen damage for more info.
Finally, if you have an iPhone 3G, DO NOT upgrade the IOS to version 4. It would be like replacing an IO540 with an O360, I kid you not. Personally I wish I was still running IOS v2.