You have have seen the news that iPhone 3G and 3GS could potentially overheats and burn the white plastic. Apple has released a guide detailing the acceptable operating temperature of the iPhone. According to the guide, iPhone 3G and 3GS should be operated between temperature of 0º and 35º C (32º to 95º F). Any temperature out of this range could potentially shorten the battery life or cause the device not functionally properly.

Apple has also implemnted a warning in the software where if it detects the unit is exceeding the normal operating temperatures, it will show the message above. It is recommended to turn off the device and let it cool down if you encounter such warning before resuming use.

Source: Apple