O2 do this already. Threaten to leave 'cos u want a crackberry from Orange and they might (depending if they have any) offer you a resurrected jeebus phone for £35 a month. Then all you have to do is notice *ahem* a part is missing, lets say part of the charger and they'll send a courier to pick up the old one and give you a brand spanking new one... Good service as always from 02.

You pay a higher monthly fee

The AT&T deals were meant to end the first week of January, but I never checked back to see

Allow me to point out the terrible, glaring flaw in that idea. As far as I can see, you still end up on O2?

$100 dollar difference from 8gb to 16gb? I just bought a 16gb memory stick for just over 20 quid, so how on earth do they justify this?

We just got them prepaid here in Australia on the Optus network.

Sticking with my Nokia 6220.

"To simplify things" ... they have a fixed repair cost for the iPhones, and it's more expensive for the 16Gb than the 8Gb. In fact it's ONE HUNDRED DOLLARS extra if the headphone jack breaks on your 16Gb iPhone rather than your 8Gb one.

From http://www.apple.com/support/iphone/service/faq/#warranty3

Out-of-Warranty Service

If you own an iPhone and it requires service for any other hardware failure, Apple will service your iPhone for the Out-of-Warranty Repair Service fee listed below. Your replacement iPhone may be new or refurbished.

iPhone 3G Out-of-Warranty Service

8GB $199

16GB $299

(the "any other hardware failure" is anything other than replacement battery)