Current iPhone owners can get iPhone 3G for $199/$299
If you are interested in picking up an iPhone 3G but worried that you haven’t had your current plan for long enough and will have to pay $399 for an 8GB iPhone 3G or $499 for the 16GB version, current owners of an iPhone are in luck–AT&T will allow current iPhone owners to get the subsidized pricing even though they’ve had their current phone/plan for less than a year. That means that the 8GB version will cost you $199 or the 16GB will cost you $299.
BUT, current owner is taken quite literally so you’ll need to have a current iPhone and it must be activated on your account or you’ll have to pay the unsubsidized price.
If you’re confused, log into your AT&T account and use their eligibility checker to see if you quality.