iOS 4 on iPhone 3G is known has being sluggish, especially memory-wise. This is a problem for Genius Scan which requires enough memory for image processing. Occasionally, Genius Scan may crash for iPhone 3G users.

One of our users solved her problems with iOS 4 by disabling the Spotlight search features in Settings > General > Spotlight. You then uncheck all the options. Of course, this makes Spotlight unusable but according to our user, "This made a huge difference."

Turning off and restarting the iPhone might also help.