This version of Reeder requires iOS 5.1 or later.
Reeder 3.0 for iPhone is a new, completely rewritten app. Google Reader integration now uses a different method for authorization, which means you have to re-add your account. Also, since most settings are now per account, these will be reset with this update too, sorry about that. The good news is that settings are now accessible from within the app.
Facebook integration for sharing is missing in this version but will be added later. If you rely on this functionality, you might want to skip this version.