Took nearly 3 hours to complete my 16GB 3G update, but everything seems to be working fine now that it's done. My advice is to be patient. Took about 15 minutes for the download, then 1 hr 20 mins for the backup (progress bar only showed 1/8 complete for nearly the entire time); 15-20 mins to install iOS4, then the remaining time to restore all of my apps, music files, etc. The only issue that I know of is that my icons were re-arranged, so I had to move them back into position. All else is working fine, so far.