Multitasking in general slows an iPhone 3G down. The least you should have if you want to multitask is a 3GS device. If you stay on 3.1.3 and use multifl0w+backgrounder, it should be much better.
I used to have my iPhone 3G on 4.2.1 and it's horribly slow. Even without multitasking enabled. With it enabled it's practically unusable. My personal opinion is to stay on 3.1.3 and backgrounder like they said above.
Another option for multitasking on 3.1.3 is Kirikae instead of multifl0w mentioned above (of course you'd still need Backgrounder installed). I really, really miss Kirikae now that I've finally upgraded to 4.3.3.