No, fair question. To be perfectly honest, the build I submitted was supposed to be iOS4 only, but despite setting that in debug and release, I forgot to for distribution, and so it's marketed as iOS3 compatible. Now, they accepted it... so I'm guessing it works... but I've only ever tested on iOS4.x devices. The iPhone 3G supports that, so it works (I myself own a 3G, can't wait for the iPhone 5, crossing fingers for fall), but first generation iPod Touches... I'm not sure.
It's out and that's that, unless I want to resubmit a build right away, so there's not much I can do about it except hope... and start working on a real update 1, this time making SURE it works on first gen iPod touches (which can't upgrade beyond iOS3.1.3) while adding the other functionality. Hopefully I can get it to the point that I can guarantee it works. And if not, then I update it to a iOS4.0 app, and hope I'm not letting anyone down.
If your iPhone 3G is not updated to iOS4 (which would be a fair thing to do, so much bloat) then I've never tested that configuration and honestly don't know. But since iOS4 is a more memory-hogging OS, it should work on the lighter iOS3.
Anyway. Hope that, er, clears that up. If you buy it and it doesn't build, hold out--it should in v1.1, and if I absolutely can't make it work and we go to 4.x, email me your address and I will mail you a button as apology.
(Also I think you can yell at iTunes to get reimbursed by them.)