I am not able to see the running apps when i double press on home button It Takes me to contacts

iOS multitasking is supported on the iPhone 3GS or later. Check the note near the bottom of the following link > http://support.apple.com/kb/HT4211

Hope that helps

Are you sure the one that has multitasking is an iPhone 3G and not an iPhone 3GS?

Identifying iPhone models > http://support.apple.com/kb/HT3939

Before iOS4, double-clicking the Home button took you to COntacts.

Check that the two phones are both running iOS 4 or above