Yes, the iOS 4 update is out and my Apple Core colleague Jason O'Grady hit the basics in his recent post iOS 4 release imminent; here's how to prepare. However, here are a few more suggestions on how to make this major upgrade as pain-free as possible.
Plug-ins. Consider removing third-party iTunes plug-ins. These are located in the ~/Library/iTunes/iTunes Plug-ins (your user home account) and /Library/iTunes/iTunes Plug-ins (the root-level folder). You will likely see one or more .bundle files. Move them to the desktop.
Photos: Make sure that all photos on your iPhone have been downloaded to iPhoto. Updates can be messy and you don't want to lose memories.
Sync success. I find that most users just plug in their iPhone/iPod and walk away. Verify that the sync was successful and that there aren't any error messages on the screen. Watching the progress in the iTunes status pane isn't a bad idea, boring perhaps but not useless in this case. Before the update, you want a good sync.
Direct USB plug-in. Don't use a USB hub for an update, instead plug straight into your Mac. Network connections. Give your machine over to this update. Perhaps consider closing off other programs that might steal network bandwidth, such as browsers and mail. This offers the possibility of a faster installation.