This is the same process you'd use if you needed to move off any iPhone onto another iPhone model. Please keep in mind that you authenticate your iTunes account and the new phone in the process, so this process is not a way to get applications on two phones for the price of one...it's a way of getting your applications, sounds, settings and more, off one phone and on to another.

Note - Credit to this Apple article (http://support.apple.com/kb/HT2109) for some of the information

1. Make sure that you have backed up your old iPhone 3G into iTunes. Connect your old phone to your Ma/PC, use the latest version of iTunes and then right-click to make a final backup, as you see in the image here...

2. Now that you have a backup, it's time to erase your old phone. Disconnect it from your Mac/PC and on the phone, go to Settings > General > Reset > Erase all Content and Settings. You will be prompted to ensure you really want to do this. This is a long process and will take some time (estimated to be 2 hours).

3. Once the old iPhone is erased completely, use the SIM ejection tool (the paper-clip type thing) to eject the SIM card from your old iPhone.

4. Insert the SIM card into your new iPhone and turn the new iPhone on.

5. Once it has turned on, connect it to your Mac/PC and launch iTunes and register the new phone, as you see here...

6. Once the phone is registered, you'll be prompted to set up the phone...with one of the options to restore the backup of your phone. Choose this option, as you see in the example here...

This will then begin the process of settings up your new phone, transferring all your applications, songs, photos etc....but the order in which this happens may differ slightly for each person.

It will also take a considerable amount of time to restore all the content to your new iPhone....and you're done!