Eureka!!! This is what worked for me: I must have accidentally bumped the button on the upper left side of my iPhone. I turned it on and, voila, the ring tone is up-and-running. Aren't technical problems usually something simple and stupid?!
Count me in on those experiencing volume resets on the 3G! I think this is a bug connected with the no sms sound in the 3g. Apple still refuses to acknowledge this issue. In fact, I don't really care if they acknowledge it as long as fix it on the next software update