I am downgrading my friends iPhone 3G to 3.1.3 because it's much too slow with 4.2.1.

I am using the following method:
How to downgrade iPhone 3G iOS 4.2.1 to 3.1.3 without SHSH and BATT ISSUE FIX - YouTube

I had a few questions, if you all wouldn't mind:
It is currently jailbroken using redsn0w, will this cause any problems?
Will this remove any and all installed apps/settings/etc from the phone, or will they be carried over? If it does, is there a method of downgrading that saves all of the/some of the above?

Thanks for any help you can give.