Yes, free with a $69/month (which includes 500 voice minutes and 500 text messages) year-and-a-half contract, but free. As opposed to the not-free iPhone's $499 and $599 plus Cingular two-year contract. And sure, the iPhone does a lot more than the Prada, but for most people, it will be the "it's cool, it has a touch-screen, it plays music, it has a camera, it's FREE, who cares!" phone.
Carphone Warehouse released it in the UK this saturday and, according to Peregrine Riviere, Investor Relations Director for the company: "They are selling like hot cakes". I bet it helps that the official price for this cellphone is $802 (600 euros), available unlocked in Prada shops through the Old Continent.
Product Page [Carphone Warehouse]