The crux of the problem is this: a new iPhone model comes out every year, but you have to sign a two-year contract. That means if you're lusting after the latest and greatest, you'll often be locked into your old contract and will have to pay considerably more than the price paid by new customers. If, for example, you want the base model iPhone 4 right away and your contract expires in 2011, it'll cost you $400 rather than $200. But AT&T is making an exception for iPhone users whose contract expires any time this year. You'll be eligible for the $200 price. CNET has an article that explains a lot of the details, including if you have a family plan, etc. And if you think AT&T's upgrade pricing is grossly unfair, you can read this helpful article in the New York Times.