Lost in all of the excitement about the newer, cheaper iPhone 3G is this little nugget: AT&T is raising the cost of iPhone data plans from $20/month to $30/month for consumers (the plan price stays at $45/month for business users).  Considering that you have to sign a two-year contract for voice and data to get iPhone 3G for $199 (8 GB) or $299 (16 GB), that new "lower" priced iPhone 3G will actually cost you more in the long run than the current "more expensive" iPhone (EDGE version).  Here's how:

Note that this is all based on what I know now - which doesn't include info on included/add-on messaging plans for iPhone,
which could sink this entire theory (though I doubt that'll happen).

You're paying $10/month extra ($30 vs 20) for the mandatory new data plan over a minimum of 24 months.  That's $240 extra over the life of the contract (more if you keep your service beyond the two-year minimum).

Apple, on the other hand, is dropping the price of the phone itself $200 - from $399 to $199 for the 8GB model and $499 to $299 for the 16 gig version.  Last time I checked, $240 was still more than $200.  So your net cost of phone plus two years of service will be $40 more than on the original iPhone, despite Apple's catchy new "Twice as fast.  Half the price." tag line.  Actually, it'll be a little more than $40 with taxes and fees and all.

Of course you'll be getting 3G data access, which I'm sure most buyers will think totally worth the extra $40 versus the current model's slower EDGE data.  But, hey, I'm not forming opinions here - just pointing out the facts lest they be lost in the marketing machine.

It remains to be seen if buyers will still be able to purchase an iPhone at the $199/299 price point and walk out of the store without activating it, or if the retail price will be higher and a rebate will be given upon signing a service agreement.