I'd be interested to know from a more technical standpoint as well- I've been publishing test builds of a physics-based game to my 3GS, with 12 global variables, and it seems to run ok.
The internal profiler suggests I'm getting around 32 FPS without much in the way of other optimisations. I briefly stress-tested by switching less essential actions to local variables and the difference wasn't noticeable, so I'd say go for it.