After installing iOS4 on my iPhone 3GS and using it for a day, I can confirm that it is snappy and seems stable.  The new email format and folder icon features are immediately useful.

But before installing, I suggest that you do the following:

1. Sync your phone with iTunes.
2. If iTunes prompts you with the new operating system, decline at this time.
3. Reboot  your system.
4. Temporarily disable your antivirus and firewall (this is much safer if you are behind a home router that provides its own basic firewall services)
5. Start iTunes.
6. If you don't get a prompt to download once you connect your iPhone, click on the phone name in the left-side panel and then choose the check for updates option.
7. Download and install.
8. If the installation generates an error, disconnect the phone, close iTunes, restart it and follow the prompt to restore the phone.  This should result in a restore and upgrade.
9. Don't run other applications while the OS is downloading.  It is a big download; just let it finish.

In my case, I had to recheck all the applications in iTunes to get them to sync with the phone, but that was likely due to the fact that my installation generated an error and required a restore before upgrading the OS.