I'll admit that when I saw the prices for the iPhone 3G sans contract ($599 for the 8gig and $699 for the 16gig), I was disheartened. It turns out these prices are a actually more surreal than they appear at first blush. Gizmodo did some math and figured out the following: it is cheaper to just buy an iPhone 3G and sign up for the contract, pay the activation fee, then cancel the contract immediately and pay the early termination fee. Check it out:
$299 - 16GB iPhone w/contract
$36 - Activation
$175 - Early Termination Fee
$70 - One month of service
Total Price Using The Shady Method: $580
...Of course, the above method does have a hidden cost: the cost of having AT&T run a credit check on you, which technically can put a ding in your credit rating if there are a lot of checks in a short period of time. There's also the ding on your morality -- financial shenanigans may make you feel like a huckster. If you try the above method, we can't be held responsible for anybody confusing you with Ron Popeil.