After jailbreakin and installing ultrasnow my 3G my battery life has decreased sharply, the iphone it self runs laggy. Any idea how I can downgrade back to 2.2?

Did you update to 3.0 rather than restore? Did you restore a backup made in FW2.xx?
Either of these causes battery life problems and is easily fixed by restoring to FW3.0 and setting up as a new phone.

I updated to 3.0 via itunes, and installed as a new iphone.

That's the problem.
Do NOT update in iTunes, click 'restore' instead.

Yes I accidently clicked update on itunes, then I used redsnow to jailbreak but that didn't work because the 3.0 firmware I had on the phone is not compatible with redsnow, so I Shift click restored to an older compatible 3.0 software to get it to work and unlock. Now the battery life is absolutely HORRID! it lasts for a few hours on locked, doin NOTHING.... Now I am regretting the upgrade to 3.0. The previous 2.0 version worked fine and battery life was great.

Just restore to 3.0.1 and then run redsnow.

When iTunes ask choose "treat this phone as new.", and you'll get rid of battery problems.