Look you lot, stop moaning! i have a 1st. gen ipod touch and I cant have folders nor the latest firmware update because of the age of the device.
My only option is to leave well alone and continue or buy the latest touch, fully compatable.
Same goes with the phone, upgrade? or leave well alone.
IMO I would wait till the antenna issue is resolved, hardware wise, not with elastic bands nor girdles and go for iphone4.
I never went with the phone myself due to overpriced contract charges, simply not worth the money, I chose android and have never looked back.
I would say that the android knocks spots off the iphone4 at present and even more so as more and more apps become available on the market.
however, its horses for courses, you buy a smartphone for your way of life and if the iphone meets your needs then once the issues are resolved it will be a cracking device albeit at a cost.