I did it, I finally did it. My phone now works the way I think it should have. I am running 3.1.3 and have no plans of upgrading to 4. First I jailbroke it using . Once that was done, I used Cydia to install the following applications:
Categories (Free) : Gives me the ability to have folder
CategoriesSB ($1.99) : Integrates the folders into the OS to make them seem normal.
SBSettings (Free) : Gives you fast access to commonly changed settings, 3G, Wifi, Brightness, IP address
iPhone OS Theme (Free) : Makes SBSettings look like it was part of the original design of the phone.
WinterBoard (Free) : Gives you the ability to change how the interfaces look and operate.
Backgrounder (Free) : Gives you the ability to actually have apps run in the background.
ProSwitcher (Free) : Gives you an intuitive interface to switch between background apps.
MobileVolumeSound (Free) : Adds the volume sound found in Mac OSX to the volume popup.
Notifier (Free) : Changes the status bar to notify you of missed calls, emails, voicemails, IM’s etc.