Here is alittle info, my old iPhone which I loved so much totally died and had everything saved on thru Cydia. Smartpoints +1

I thought the best alternative then paying high money for a old new iPhone , $150 for iPhone 4 with 2 yr contract renew....

Well I bought a used iPhone off eBay with 3.1.2 , it was never able to save shsh on cydia so I knew it had problems to begin with. I used delete all settings and media and that just fubar'd the phone. Had it stuck in recovery mode with no cydia blobs to restore from ... Last option let apple fix it.

Apple ended up putting 4.0 on it which leads me to the question...... What should I do?

Is a 4.0 jailbreak coming out soon that I would be able to
use? (3Gs mc model, old bootrom, no shsh stored)

Should I just buy a iphone4 and hope a jailbreak is coming out soon?

Try luck with eBay again, sell the old phone and make sure the new buy leaves it jailbroken and formats thier settings and data off.