Wi-Fi problems that appear after the latest firmware update are irreversible and cannot be solved by rolling back to the previous version. The upgraded iPhone controls the Wi-Fi chip wrongly and it gets hot. It has been noted that the malfunction occurs only in iPhone 2G and 3G.
Most likely, the firmware version 2.2.1 removes a kind of power restriction of the chip and it begins to work at full power and gets hot. The only thing you can do is to place the device in the refrigerator and it really makes iPhone work properly. If the problem is software related, then we can expect the manufacturer to provide us with the solution. If it is hardware related, then there seems to be no solution at all.