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All the phones are going to the direct fulfillment program, so don't expect to just walk into a store and buy one. They're not getting them, and won't, until the shortage is over:

We hope to begin re-stocking our stores as soon as we can, but first priority goes to those customers who purchased through direct fulfillment.

Our advice? If you've gotta have one NOW, take Friday off, drive to an Apple Store before it opens, and make an urban camping trip out of it—bring beef jerky, a fishing pole (to fend off panhandlers) and guitar to sing Kumbaya, which, with any luck, will drive people out of line. [AT&T]

AT&T is not currently planning to use this tech to manipulate current iPhone apps (Contacts? Maps? Mail?) but instead will deploy it in web services for a number of net-enabled handsets. This is a somewhat curious choice for AT&T, but it would be difficult to implement system-wide speech recognition without either modifying existing apps or running a (currently disallowed) background service to catch commands. Speech Mashups will be an interesting service for the other handsets it shows up on, but they already have simple voice commands. By building secondary voice capabilities like this for a phone without basic ones, AT&T has inadvertently highlighted one of Apple's most irritating restrictions on iPhone development. [Gadget Lab]

"We have not made any announcement regarding free Wi-Fi and iPhone. The webpage was posted in error and is being removed. Wi-Fi is a real differentiator for AT&T and it is our intention to make it available to as many customers as possible, but we have no announcement at this time."

Can you just make up your mind then? [GigaOm]

Nice. I called the manager whose name is listed at the bottom of the documents, and he told me that he had emailed the articles to his employees but in no way intended for them to copy them and hand them out to customers. Instead, they were meant to be used as talking points for getting sales in stores where the iPhone wasn't available.

It's understandable for a retail operation to try to get sales when what the customer came in for isn't available. What's less understandable is laughing at customers and handing this kind of thing out to try to discourage them from buying their carrier's flagship phone.

If there's anything that we can learn from this, it's this: AT&T won't ever have the unified face that Apple store employees do if they're going to have third party stands with third party phone lineups. Also, don't buy phones from stands in malls in New Jersey.

[AT&T Video Log]

We just learned that AT&T's policy of allowing current iPhone owners a subsidized upgrade—even though they're only as most one year into their two-year contracts—quite literally applies to current iPhone owners. That means that if you sold your iPhones recently in order to raise money for the new one, you might be out of luck. And by out of luck, we mean you have to pay the unsubsidized price ($399 for 8GB and $499 for 16GB) in order to upgrade to the iPhone 3G, not the $199 and $299 you thought you were going to pay. Let us explain.

We've confirmed from an AT&T rep that if you aren't using the iPhone, then by definition you aren't an iPhone customer. That makes you a regular AT&T customer with regular upgrade qualifications. How does AT&T know whether or not you're using the iPhone currently? Well, when you stick your old SIM into a new phone, they can detect exactly what you're using even if you haven't switched your plan to something else besides the iPhone plan. Bottom line is, you should go to AT&T and use their eligibility checker to see if you qualify. If you're really lucky, you only sold your phone recently and you haven't gotten around to sticking your SIM into something else.

First dilemma: Apple Store or AT&T?
The Apple Store is way cooler than any AT&T shop, so that's where the zealots, cool kids and attention whores will be lining up. But according to Gary at the ultimate Apple retail blog ifoAppleStore, they're also going to have the most stock (logically). His guess is that, based on the original iPhone's first three days of sales, "each of Apple's 217 stores should be receiving between 750 and 1,000 handsets for sale this time." Happily, you'll be able to check a store's next-day stock every night after 9PM.

If you're getting an enterprise plan, your choice is made for you too: You have to hit an AT&T store. But there may be other reasons to go to AT&T instead of Apple. AT&T's stock per store won't be as heavy as Apple's (Apple's controlling distribution, so they're going to favor themselves, naturally) but Gary says AT&T's allotment will be better than last time. AT&T wouldn't comment on how many per store, but Gary thinks north of 50-75, even in the boondocks, and another source tells us 100-250. Though AT&T wouldn't comment on the spread, logically, stores in more populated areas are going to get more. Our advice here is to plan and scout ahead: Drive by on the night before, or just early in the morning, and see if there are lines. If the AT&T store is surrounded by coffee shops and boutiques and has a line running down the block, maybe try one in a sketchier neighborhood. Oh, and no, you can't just skip the lines and order it online, at least for now. There's no word on when you'll be able to, either.

If you want a white iPhone, you may be out of luck: AT&T confirmed they would have both 8GB and 16GB models, but could not confirm they will have the white iPhone 3G. In fact, based on the fact that UK reports say there isn't a white iPhone in the whole of the British Isles, we're gonna go on a limb and say that either a) the white iPhone isn't available at launch, or b) it's going to be a devil to track down, like those pink iPod minis way back when. Best bet there is to hit the biggest Apple Store you can find, and sweet talk your way towards the front of the line. But there's no guarantee. We asked Apple, but predictably we have not heard back on this matter.

Camping out
If you're deadset on purchasing the JesusPhone 3G under the warm glow of the divine, you might just have to camp it out. Here's Giz's list of essentials:
• Laptop with lots of spare batteries (a solar generator if you can hack it) and a 3G card
• Beef jerky and Cliff bars (compact, easy energy)
• Adult diaper
• A friend you can pay to wait in line for you
• Patience, deodorant (more for us, than for you)

You made it inside!
AT&T has confirmed it's one per customer, period. No official word from Apple, but since they're actually sort of in sync here, we expect it'll be the same. Here's what you'll need when you get to the counter, straight from Apple: credit card, social security number, valid government-issued photo ID and, if you're new to AT&T, your current wireless account number and PIN. That's right boys and girls, no cash. And don't forget to sync your old iPhone one last time before you roll in.

Despite reports suggesting the contrary, AT&T has reiterated to us that you will have to activate in store. Like really, it don't get much plainer: "YOU MUST LEAVE THE STORE WITH THE PHONE ACTIVATED." They estimate it'll take 15 minutes. Apple's page also refers only to in-store activation, which they say will be mercifully over "in just a few minutes." Update: Apple retail chief Ron Johnson confirms in-store activation only at Apple Stores, while shattering our nimbler expectations by repeating the 10-15 minute blurb.

If you get there too late and it's sold out, don't hurt yourself (or others). At least at AT&T stores, you can go ahead and pay for the iPhone 3G, and they'll call you when it comes in. Then you can go to the store and activate it. Last year after the initial stock ran out, most people got their phone by the following Wednesday via 2nd day air, so we expect this year there will probably a fresh shipment pretty soon after initial run.

Don't fall for this stuff:
AT&T has told us they've taken steps to ensure you won't be forced by a rogue manager to buy an accessory bundle to get your iPhone 3G. You never have to buy an accessory pack. If someone pulls that on you, call them on it. If they insist, back out, report their ass to corporate and let us know. It's BS, so don't get screwed. Also, there isn't an iPhone insurance plan from AT&T. If they offer to protect your iPhone 3G for $100, it's a scam. Period.

Something we left out? Let us know and we'll update (they'll be at the bottom). Good luck and godspeed!

Update 1, Re: Family Plans: AT&T tells us that "the person in line who is buying the device must be the person who is paying for the device. If the person in line is buying for a FamilyTalk plan, the people who will get the device must be in line."

Update 2: You'll be able to check an Apple Store's next-day stock every night at 9PM.

There's a chance you won't, actually, see this TV in a few years, at least served up from AT&T. Only 379,000 subscribers are currently hooked up to U-Verse TV, and it's not available to a whole lot more than that. Rollout is slow. But listening to Peter Hill, VP of voice and converged services, talk about what the company is working on for U-verse, you'd never know that everything he was showing me was just for a tiny, privileged sliver of TV viewers. (BTW, for a great hands-on cable vs. U-verse review to see what they're getting, check out this piece.)

The first thing I spot—and ask about—when I walk in is the Xbox 360 on the shelf, a ghostly reminder of the promise of a ubiquitous IPTV box. The status? Microsoft and AT&T have to "come to terms" on it. Whatever that means, but the shaky laughter dotting our exchange implies you'll probably never see it in the States. On to the real show.

Integration is the key to AT&T's IPTV vision—integration with the internet, with your home network and media, integration with AT&T's services. But that doesn't mean TV itself is taking a backseat. Whole home DVR is arriving soon, so that one DVR box will stream content to any and every TV on the network (currently, only the TV directly jacked into the DVR can play back DVR content). You'll totally be able to pause something in one room, and pick it back up in another. With whole-home DVR, the box will be able to simultaneously stream eight feeds to every TV in your house: Three hi-def plus one standard-def stream from the DVR, plus 2 HD and 2 SD streams of live programming. All those TVs are getting all that content from one box. (For the nerds, each HD stream is encoded in MPEG-4, running at a variable bit rate that hovers around 6.5Mbps. The U-verse pipe is built on a 25Mbps profile, which is divvied up by high-end QoS for TV and your internet.)

Next, we go into some of the media sharing stuff, which probably looks familiar to anyone with an Xbox 360 or media extender since U-Verse uses Microsoft's IPTV platform. Music, movies, pictures, streamed to your TV from a standard Windows Vista or Media Center PC on the network—basic, but nice, since this is all just pumping into your set-top box. They've also got TVersity running off their network, which basically will stream anything to any device with a web browser, be it PSP or iPhone. It's running over Wi-Fi and it's actually damn snappy. I'm not really sure how this fits into the IPTV platform, other than their vision of a totally networked home.

All of this is "six to nine months" ahead of the field now. So, you could expect this stuff in the next year, though it's not officially announced yet. It's all about mainstreaming media streaming and sharing—a baby step, but probably necessarily to get, say, your parents ready for what's coming after it. This is when Peter pops on the "ultra-bleeding edge box" though he warns me none of this is actually guaranteed to become a TV reality.

Fire up the box. Welcome to Peter's favorites. Yep, like Sezmi, everyone gets their own personalized TV setup, with recommendations, favorites, etc. You can also log in and control the set-top box from the iPhone, like a sweet multi-touch remote. It's running over Wi-Fi and it's as responsive as any other remote control. But you know, sexier. An app for streaming to the iPhone? Not yet, I'm told, since there are "certain areas of the iPhone" where "Apple is keeping the experience..." "Controlled?" I volunteered.

It's a good transition to the more internet-y stuff they've got going on. Integrated RSS feeds—you can read Giz on your TV and have it not look like crap! Video RSS feeds are where it's at though, like a feed of CNN clips that constantly refreshes. It's like Headline News, without the waiting. Course, it can also pull in YouTube, though I'm more interested in Hulu.

Here's where AT&T benefits from being AT&T here, with your phone jacked into your set-top box. Maybe more "cool" than critical. A message asking for a video share call from a local Atlanta 404 number appears on the screen. Caller ID on the TV. We smack yes, and we're looking through the eyes of an LG Glimmer on our TV. Yeah, it looks like shit on the 60-inch DLP set, but it really works. Next, I call Peter's cell and leave a voice mail. A few seconds later, we're informed by the TV we've got a new voicemail waiting, so we flip over to a list of incoming calls. We can remotely check out the voicemail or add the contact to our address book.

The finale: It's basically Twitter TV. You jump into a chat room with your friends (or invite them) and you can bleat out IMs that are collected on a timeline as you watch Leonidas atomically kick effeminate Persians into bottomless pits. And lest you were worried about text-typing via a crappy remote control, I actually used an iPhone to input the text. Later you can go back and scour the conversation timeline like regular IM, looking for a nugget of insight that might've accidentally slipped out during the orgy of violence (or whatever else you and your friends are simultaneously watching). BTW, the cheesy avatars will be updated to look less like late-'90s Messenger, I'm told.

While these are all, by themselves, just little bits of coolness, taken together, it is a shift from the mostly passive way we watch TV. We actively time and place-shift now, but once we're plopped in front of the screen, input from us stops, despite decades of prediction that TV would become more and more interactive. U-Verse is not wholly revolutionary, but it's a stride toward true TV 2.0, with content from multiple sources, fueled by the internet. TV's got to do something, after all—there's less and less reason to be drawn to that particular idiot box, when there are so many boxes out there for so many different kinds of idiots. Of course, cable's got its own ideas about the future of TV, and soon we'll be looking into that too.

Actually, AT&T has told us that there will be no limiting difference between the two stores, except one thing. If you are a business or enterprise customer, then you should buy your iPhone from AT&T. Here are the full details on business scenarios:

For those business, or enterprise customers, they will get their iPhone 3Gs through their normal IT processes. This will ensure that their business can take advantage of any corporate discounts that may apply.

Activation will work [one of two] ways:

— If your company pays the bill for your iPhone 3G: Your IT department will provide you with iPhone 3G, just as it does any other device. Then, all you need to do is sync it to iTunes from your computer and it will be good to go. You do not need to go to an AT&T retail store.

— If you pay the bill and are reimbursed for it by your company: Buy the iPhone in an AT&T retail store. Give the salesperson your company's contract number with AT&T and the device will be activated.

And if you're still wondering about details like pricing, be sure to hit up the FAQ.

But first, the basics. The difference between the TV you're used to and this fancy IPFreelyTV stuff is that IPTV is delivered to you like any other data sent over the internet—in data packets. You even plug an Ethernet cable into your receiver box/DVR. Of course, the internet's a messy place with lots of muck bouncing around the pipes and you'd be really pissed if the Yankees game stuttered or crapped out, so this is all running on the telco's "walled garden" network with a fat, dedicated lane for video. (Your internet service, which is bundled since it's running on the same network, runs on a different lane, delineated by quality-of-service, or QoS, protocols.)

Now that that's out of the way, back to why its good for HD. With a standard cable setup, the channels are basically always being piped into your home, whether you're watching or not. To add more channels, they've gotta compress 'em down farther or open the pipe up, especially since HD eats up a lot of bandwidth. Since IPTV is sent in regular ol' data packets and the system is two-way (the nature of internet protocol), they're basically only sending what you ask for, when you ask for it. So theoretically, they could offer way more HD channels than cable, since they're not as limited here. Also, like that mythical Xbox 360 IPTV box, the number of streams you can watch/record simultaneously is basically only limited by your bandwidth.

The two-wayness of the infrastructure is another point of awesomeness. It can be used for actually useful interactivity—one of AT&T's apps for the Olympics can bring in a stats feed you can check out while watching the game. Or regular internet video, like YouTube, can be piped in and integrated with the other video on your box. It's all just regular data over standard internet protocols, so there's a lot of flexibility to do stuff you simply can't with a traditional setup.

The problem is that building the infrastructure necessary for IPTV service is slow and expensive, largely cause it requires a heavy fiber optic component. Verizon runs fiber all the way to your door (which is why it can offer those crazy FiOS internet speeds), while AT&T runs it to the node, which you're then connected to with copper and (which is why U-Verse internet is slower). So right now, both have puny subscriber numbers—1.2 million FiOS TV customers, and a scant 379,000 on U-Verse TV.

Still, there's a lot of potential in IPTV, even if it's taking forever to get to your doorstep. AT&T actually showed me some of the stuff that could be at your door in the 6-9 months—and beyond—and it's definitely worth getting excited about. We'll be telling you all about it later.

Something we missed, or you still wanna know? Send any questions about IPs, TVs, chewing gum or anything else to tips@gizmodo.com, with "Giz Explains" in the subject line.

The mini-notebook market is heating up, with today bringing stats and shots of the Asus's latest Eee PC with its tiny screen and keys that might work with normal hands. Then later, we get news of a leak about Everex, Asus's competitor in this market, about its next Cloudbooks, including one with a 10.2-inch screen and 3G connectivity, and another with an 8.9-inch screen and WiMax.

No definite word on if they'll be using Intel's Atom processors or competitors from Via, or if they'll be XP or Linux machines, but the makers of the reference design, FIC, would confirm a screen resolution on the 10.2-inch model at 1024x600. It will also feature a 1.3-Megapixel camera, 2GB RAM, card reader, dual USB 2.0 and an express card slot.

Less details are known of the 8.9-inch model, though the specs should be similar, including resolution. The devices might be subsidized by 3G carriers like AT&T or Sprint—if they ever hit the US shores, which there's no promise of.

We liked the Cloudbooks we've seen so far, and we can't wait to see if a slightly larger model will actually be usable for those of us with big, bear-like hands. [PC Advisor, via Slashgear]

$299 - 16GB iPhone w/contract
$36 - Activation
$175 - Early Termination Fee
$70 - One month of service

Total Price Using The Shady Method: $580

So...

8GB iPhone Canceled: $480
16GB iPhone Canceled: $580
8GB iPhone Unlocked from AT&T: $599
16GB iPhone Unlocked from AT&T: $699

Are we missing something?

For a shortcut to plan pricing, read on:

As for the subsidized iPhone pricing, AT&T has clarified that it's available for "new customers, current postpaid iPhone customers in good standing prior to July 11, and AT&T non-iPhone customers who are currently eligible for an upgrade discount" with a two-year agreement.

A lot of has to do with the fact that Android itself is still baking—it's hard to develop for an OS that isn't totally set and firm to the touch. So, even though Google has lotsa cool prototypes like one "a long touch-screen, similar to the Apple iPhone, a swivel-out full keyboard, and a trackball for navigation similar to the kind on some BlackBerrys," developers are having to constantly rewrite apps because the OS is in flux.

The Weather Channel admits it has already had to "rewrite a few things," and the latest version of Android is going to require some of the biggest revisions yet. The iPhone's SDK on the other hand, is ready to go, and many developers are already familiar with OS X. (And if developers are choosing one platform over the other, that's where Android's real trouble starts.) Topping it off, phonemakers like Samsung aren't having a jolly time integrating it either.

Sprint's woes are in part due to the fact it wants an Android phone with Sprint services, rather than a generic Google-y one. Because of the pushback, they might skip over a 3G Android phone and just do a WiMax one (though that doesn't make much sense to us—the EV-DO footprint is and will be way bigger than gimpy WiMax's, even in the first half of 2009, and that's being optimistic). Curiously, no word on the newly open Verizon's front, but given how messy Android is right now, even with all of its promise, we can't really blame AT&T for sitting it out for now. [WSJ]

Found on Time. Think you can do better? You probably can. Hit the comments and give it your best shot. [Time via BGR]

Go to Pogo's site and enter this code: gYPL6vLf. (Minus the period.) When the code dies, let us know (we'll try to get more), as well as what you think of it. Min specs ain't super minimal, BTW, cause of the 3D trickery, and they recommend more:

•Intel / AMD processor @ 1.0 Ghz or higher
•1.0 Gb Ram (as low as 512Mb minimum for systems with a dedicated video card)
•Discrete or Integrated video card with 128 Mb Video RAM, DirectX 9.0c hardware compatible
•Desktop set to 32-bit color

[Pogo]

To sum that up, the Instinct is easily the best, most feature rich iPhone clone on the block, and at $129, is a steal for Sprint customers. My major problem with it is the touchscreen itself—I think the Vu's touchscreen is way more responsive. (Wilson likes it just fine, favoring it over Verizon's cloneys.) The Vu has everything superficial down right—the touchscreen, keyboard (best of the bunch) and phone body—but is really lacking in the feature department, and therefore not really worth the new $199 price, which hinges entirely on its Mobile TV function. If you married the Vu's body and touchscreen to the Instinct's features and price, you'd have a champion here, and a serious iPhone challenger. Too bad LG and Sammy hate each other.

The Voyager isn't considered an iPhone clone anymore, not in the strictest sense, though most of its problems stem from Verizon software rather than the hardware. As Wilson said in his review last fall, it's ambitious but flawed—and the flaws are mostly on Verizon. I'm really hoping Verizon lets the Dare just breathe, because the Vu proves LG is best left to its own devices. The Glyde is just a truly terrible phone. Most clay bricks are more responsive than its touchscreen, especially around the edges, and the crappy, sluggish Verizon software doesn't help. And its keyboard ain't much better.

One thing they all have in common is a shitty browser. There isn't a mobile browser that touches mobile Safari yet. Even when they could render HTML correctly, moving and zooming around the page (especially ones that aren't mobile optimized) is an exercise in self-control—how long can you take it before stabbing your eyes out. Opera mini does load on the Vu, and it's better than the included browser, but it worked kinda wonikly at times. For me, that's a critical flaw in all of these phones.

Best to worst: Instinct, Vu, Voyager, and Glyde.

UPDATE: Check out our review of the LG Dare, which gives the Instinct a run for its money

Can I activate my iPhone over iTunes like I did the first time? Apple and AT&T want you to activate your phone in stores, but there's a possibility of activating it over iTunes if you somehow didn't do it in the store. However, you will be required to sign an agreement while you're in the store stating that you're going to enter into a 2-year contract eventually, and you'll be penalized if you don't sign up within 30 days. More details are here.

What's the price for the iPhone for existing AT&T customers who may or may not be eligible for an upgrade? AT&T's just told us that yes, ineligible customers will have to pay the full, unsubsidized price for the iPhone. See the post for more, but basically it won't be $199 and $299. No official price has been set yet.

If I buy my friend's old iPhone when he updates to iPhone 3G, can I use it as a cheap iPod touch without activating it? Yup! Everything but the calling features should be active, except it will say "No SIM" at the top. Thanks Andy.

In light of MobileMe apparently being an instant push service, will iPhone 3G also support push from other IMAP service providers? We haven't heard any word from Apple that there's any kind of push email besides to MobileMe and Exchange servers, not counting Yahoo, which is already push now. Thanks Andrew.

Will you be able to buy insurance through AT&T like for other standard plan phones? AT&T's Asurion will cover all phones for $5 EXCEPT the iPhone, which is the way it's been since the first iPhone's launch. Thanks John.

What are the chances of Apple releasing an iPhone with increased data storage before the next-next gen iPhones come out? Pretty damn likely. I'd expect a 32GB iPhone some time late this year or early next year. Thanks David.

What will happen to the current Installer.app once the App Store launches? Will people keep updating this or will it be considered piracy? Apple doesn't exactly welcome the current Installer.app and jailbreaking efforts with open arms. However, since the App Store is going to be bringing in revenue to Apple, it's possible that through jailbreaking and Installer.app, you could bring pay-for-play apps for free onto your phone without actually paying for it.

My wife currently has a [insert lousy phone] with AT&T. Will she be able to keep her phone number when she upgrades to the iPhone 3G? Yes. She'll be able to renew the contract for 2 years and still keep her phone number. Thanks John.

I've got international roaming on my AT&T plan now. Can I take the iPhone 3G to various countries, including Japan? We don't have official confirmation of this from Apple yet, it's likely that your phone will work in Japan. The iPhone is Quad-Band, which means it works on GSM/EDGE on the 850, 900, 1800, 1900 MHz frequencies and UMTS/HSDPA on the 850, 1900 and 2100 MHz frequencies. Because of the reports that Apple's using Softbank to distribute iPhones in Japan, we can deduce that you should be able to roam just fine. From Wikipedia:

SoftBank Mobile currently operates both PDC (Japanese 2G) and W-CDMA (UMTS 3G) networks. SoftBank's 3G network is compatible with UMTS and supports transparent global roaming for existing UMTS subscribers from other countries outside Japan. Subscribers of GSM networks having roaming agreements with SoftBank Mobile can also roam on the SoftBank 3G network by using UMTS handsets.

Thanks Randall.

Will MobileMe users have the ability to perform a remote wipe of their lost/stolen iPhone 3G? It's not one of the features listed on Apple's site for MobileMe, and it's more a business/Enterprise feature. It's unlikely, but we don't know for sure.

Will you need the $45 AT&T Enterprise data plan in order to use Exchange or MobileMe? For MobileMe, no. That'll be available to everybody. We're checking on the Exchange part. Thanks Thomas.

What will happen to my rollover minutes I accrued over the last year? AT&T's preliminary answer says that you'll keep your rollover minutes, but there's no official statement on this yet. Thanks Brian.

I have 2 years of AppleCare through October of 2009. If something happens to my phone in the future and they want to replace it, will I get an iPhone 3G or the old one? That depends on Apple. If they've got any stock of the original one, they'll give you a refurbished unit. If they've only got iPhone 3Gs left, you might get lucky? Thanks Boyd.

After I activate my iPhone 3G, will I be able to sync all the settings from my old iPhone onto it? Yes. When you activate the new phone, iTunes will ask you if you want to sync the old existing data onto it. Do a sync with your old phone before docking your new one and you'll be set. Thanks Andrew.

From Best Buy and Wirefly:

AT&T Cell Phone Upgrade
Am I Eligible for an AT&T Cell Phone Upgrade?
Not all Cingular/AT&T customers may qualify for a cell phone upgrade. At this time, AT&T Mobility allows these customers to upgrade with no upgrade fee when they commit to a new 2-year contract:

AT&T customers who have had 24 months of cell phone service since activation of their cell phone or since their last phone upgrade.
Certain AT&T customers may be eligible for a cell phone upgrade even if they have been in their current plan for less than two years (24 months), if they commit to a new 2-year contract and meet these eligibility requirements:

Customer has had a standard calling plan plus data services costing at least $68.99 a month but no more than $98.99 a month, and who has been in contract (and not had a phone upgrade) for 21 months or more,
or
Customer has had a standard calling plan plus data services costing $99 a month or more, and who has been in contract (and not upgraded) in the last 12 months.
A customer with a calling plan and data services of less than $69 who is 21 to 23 months into contract may upgrade for a fee and a commitment of an additional two-year service contract extension. No upgrade fee is assessed for any customers who are on a month-to-month agreement.

Note that AT&T upgrade eligibility may be further limited based on customer’s usage history, payment record, previous phone replacement, etc. Upgrade eligibility is solely determined by AT&T Mobility at its discretion.

And here's our gigantic FAQ about the iPhone 3G.

By taking a subsidy on your phone up front (such as on the iPhone 3G), you're paying less in exchange basically telling AT&T that you're going to stick with them for 2 years. If you want to leave, you can pay that $175 and get out of your contract. In this case, with the iPhone 3G, it basically lets you walk away with a iPhone 3G that you can use on T-Mobile for $374. That's not too shabby.

But a recent AP report said that Sprint waived all ETFs to a government agency that was signed up with it, essentially because "the government will never, never accept such penalty amounts." [Ars Technica]

As we mention in our ultimate iPhone 3G FAQ, written by the esteemed author of How to Do Everything With Your iPhone, they didn't allow tethering with the first iPhone either (not that EDGE would've been a wild ride anyway). This just seems to make it more of a lock—at least without some hackage. If Apple winds up allowing tethering, AT&T will probably come up with a plan, or simply apply its standard smartphone tethering plan, but either way, we'll let you know if we hear different. [iPhone Atlas via TUAW]