Does anyone know if the Apple stores in Chicago area are replacing defective iPhones 3g with the new 2.2.1 fw or it is the older one?

Thanks

When Apple normally does their swapout, regardless of the firmware on the unit in the white box, they hook it up to iTunes and install the latest firmware. I doubt you will be able to leave the store with a version older than 2.2.1 but I don't know for sure.