I love my iPhone 3G, but the one major (and I do mean major) issue for me was that there was that when it connected to my 2007 Prius' OEM Bluetooth system, there was an annoying echo and complaints of my voice frequently breaking up (though callers sounded fine to me).
Luckily, the solution was pretty simple in my case:
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Initiate a call via your Bluetooth system.
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Press the "Volume Up" button on the iPhone 3G until its "Bluetooth Volume" is cranked all the way up.
Voila, virtually no echo and the calls didn't break up any more! The difference was instant and noticeable.
If you have a Toyota, Lexus, BMW, Nissan, Infiniti, Volvo and other make of car and have the same issue, I recommend trying the solution. I used it to fix my echo/break up problem twice (once originally and once after a firmware update reset my Bluetooth volume).
Unfortunately, I discovered that it isn't working for everyone as you can see in the comments below.
UPDATE: Of note, is that I adjusted my Prius' Bluetooth microphone sensativity before taking the above steps, and John says in his comments below that it helps doing so.
Here's a link that explains how it's done for the Prius: http://priuschat.com/forums/audio-electronics/33443-low-bluetooth-microphone-volume.html. Note that certain settings in diagnostic mode can ruin your car if you're not careful, so just stick to adjusting the Bluetooth mic.