Apple has made available the iOS 4 update for users of compatible devices. This operating system upgrade is available for free for all devices from the second generation on up. This means that it just the original iPhone and iPod Touch are not capable of running the new operating system.
From what Steve Jobs mentioned in his presentation of iOS 4 and later of iPhone 4 it seems the upgrade restrictions are really a matter of the older hardware being incapable of coping with the demands of running multiple user tasks or handling the graphics requirements involved with the new software. Ars Technica has already published a review of the iOS 4, running on the iPhone 3Gs.