After several months of beta testing and bug fixes , iPhone 3G OS 3.0 /firmware 3.0 is available for download .iPhone OS 3.0 will bring several hundred features into iPhone 3G and iPod touch and is considered to be a major update .All iPhone 3G users can update to latest version of iPhone OS by connecting their iPhone 3G /iPod touch to their desktop and by using iTunes .Check out these finished screenshots of  iPhone OS 3.0 installation.

How to install iPhone OS 3.0 :

Download iTunes here (I know you have it installed ).
Select your iPhone under Devices in the Source List on the left from iTunes .
In the iPhone Summary pane, click on check for Update.
(Or restart  iTunes with good broadband connection )

iPhone OS 3.0 installation screenshots :

Now a new Window appears asking you to download and install iPhone OS 3.0 .
Click on download and wait till it finish .

iPhone OS 3.0 installation screenshots

After installation restart your iPhone 3G with new iPhone OS 3.0.