Multi-resolution assets

Hello. We’re working on our first project that will support the resolution on both iPhone3 and iPhone4. What I’m curious about is the best way to handle the different resolutions in one app. Should we

a) Use iPhone3 resolution graphics and scale them up for iPhone4
b) Use iPhone4 resolution graphics and scale them down for iPhone3
c) Have both assets in the app and then just choose at runtime which ones to use.

This is our first multi-resolution app so I might be asking the wrong questions but any help is appreciated.
Thanks
-Mo

I used a mix.

Firstly I do the graphics at iPhone 4 size. If it also looks OK at the lower resolution, then I leave it as is. Most of the time it could look much better, in which case graphics are included for both and are selected at run time.

I usually have assets for both resolutions and load the right ones at run time.