This is interesting. I don't know if it's something with my phone specifically, but the whole thing just lags by a couple of seconds whenever I try to type something. It's so bad that I'm usually done typing a couple of words by the time the first characters come up on the screen ..
If you can, take it in to an Apple Store. It really sounds like you have something going wrong in hardware. Like vondur said, it sounds like bad flash memory.
Check your logs/system diagnostic, if there's nothing strange try a complete reinstall (without restoring from a backup), this is abnormal, most reports are that the 3GS is as fast under iOS5 than it was under iOS4, if not faster.
Mine too. I'm upgrading to the 4S because of this. Can't wait for the 5. I also have a Nexus One for development. I find it hard to believe it was $600 in Jan 2010 and now it's obsolete.
I wouldn't consider the Nexus One obsolete. The whole point of the N1 is that it has an unlocked bootloader, so you don't need Google's blessing to run custom roms or newer versions on your hardware.
There are already ongoing efforts to port the 4.0 SDK images to run on the Nexus One and the Nexus S, and I guarantee there will be even better options once the source code is released.
Use the freedom you paid $600 for to run ICS on your phone anyways.
I remembered when this happened to be when iOS 4 came out and I still had a 3G, a complete wipe/restore solved the problem for me that time, perhaps that will work here, YMMV.
