What is the complete list of iOS devices (iPod Touch, iPhone, iPad) that are unable to update to iOS 4.3 or higher?
According to Apple, (scroll to the bottom of the page) only the two most recent generations of each device can upgrade. So both iPads, the iPhone 4 and 3GS and the 3rd & 4th generation iPod touch. One exception: The CDMA (Verizon in the US) iPhone 4 is staying on 4.2.6 for a while. It has some, but not all, features of iOS 4.3.
That leaves the first two generations of iPod touch and the original iPhone and iPhone 3G unable to use it.
The 3G and second-generation iPod touch got stripped-down versions of 4.0-4.2.1. (No multitasking, homescreen wallpapers, or printing.) The other two devices left out (1st-gen iPod touch & iPhone) didn't even get 4.0.