IPhone 3G after iOS 4 does not wakes after Lock or auto lock.

Question

Hi,
I have an iPhone 3G (not S), I upgraded it to iOS 4.0 on Tuesday June 22.
it took around 2-3 hours for the whole process, but it all workd out fine.
Now I have two issues, one major one minor.
Major issue:
Every time I lock my phone, by using the (sleep/wake button), or if the phone gets auto locked, and if I leave it for a minute or so. I cannot wake it up by pressing the Home menu button (the round button in front). The only way to bring it back to life is to hard boot the phone by pressing the sleep/wake button and the Home menu button together for 10 second. This boots the os back to life, takes around 1-2 minutes. While the phone is inactive, if I make a call to it, on the calling side I hear the ring tone, but the phone lies dead like a stone. So no incomingcalls or SMS, while the phone is in this state, and the caller thinks I am not picking it up.
So far I am avoiding problems by not locking the phone at all, but that is eating up my battery.
Minor problem: as many have mentioned earlier also, it has gone too slow. And a substantially short battery life, accompanied by unusual heating.
Tried restoring the phone using iTunes 9.2, I am hitting 1602 error there, so tried restoring in the "Recovery mode", it worked fine, but the problems persists.
Another thing I noticed was that I can never switch off the phone too.
Every time I press and hold the sleep/wake button and initiate the Power off mode, either of the two things happen.
1) The circular star loading animation starts, gets stuck a some point, and suddenly the phone boots back to life after some time.
2) The circular star animation continues, for hours, untill the phone runs out of battery and dies out itself.
So far I have'nt seen a clean shut down after the upgrade.
what to do....

Answer 1

used
http://lifehacker.com/5572003/how-to-downgrade-your-iphone-3g%5Bs%5D-from-ios-4- to-ios-313
and downgraded to 3.1.3 and my iPhone 3G is usable again.