First Look: iOS4 on iPhone 3G vs 3GS

I spent hours with apple on phone and playing with my itunes trying to update this to 3g to 4.0 . Only conclusion I have come to, is that you have to restore your 3g back to factory settings , then do the update then back up , it's the only way to do it. (taking a chance on loosing data and info. For what you get here, I rather just get the new iphone 4 than deal with all the hassle of going though that process.
Anyone have this same issue ? I read in the blogs they are calling it a restore to get 4.0 on to 3 g not a update .. ?????