iMovie has been modified to run on iPhone 3GS, making the previously iPhone 4 exclusive app just a tad less exclusive:
David Romhan Torres: I just make iMovie for iphone 4 run on an iphone 3GS, it’s very simple just download it from iTunes, modify info.plist file and change the Minimum system version to 3.0.0 and front-facing-camera to false
If iMovie can run on an iPhone 3GS, why did Apple make it iPhone 4 exclusive? Probably for the same reason there's no video recording or wallpaper on an iPhone 3G. Apple is very quick to cut off older hardware when they think it will have any impact at all on user experience. iPhone 4 has double the RAM and a faster processor and that's what Apple decided to make the cut off point.
And just like 3rd parties came up with video recorders for the 3G, iPhone 3GS has had video editors for a while already (Reel Director, obviously), and will obviously continue to do so. Just not Apple's. It's how they roll.
Taimur over at Redmond Pie gave the iMovie for iPhone 3GS mod a whirl and you can check out the results in the video below.