The New Cheaper iPhone 3G That Costs More

With one catch. The phone is now $200 cheaper. But the plans for the iPhone are now $10 more expensive. So you save $200 over the old iPhone. But you also pay $240 more over the two year contract. So the new "Half The Price" iPhone is actually $40 more than the old iPhone.
$70 is pretty damn expensive for a 450 minute/month cell phone plan, even if it comes with unlimited web browsing.