I already want to sell my iPhone 3G S!

How bad do you want to get rid of it? Yes, you should be able to sell it just fine and drop the iPhone data plan from your contract. Actually I believe AT&T (assuming you're in the US) has a 30 day satisfaction policy where you can actually just return it to them and change your plan. Although if you were selling it for "cheap" there are many here, myself included, that would want to get an upgrade from our 3G at a lower price.

Unless you are going to return it to At&T, you'll be on the hook for the unsubsidized price of the phone if you cancel your contract.

You should have no issues returning it to AT&T although I don't know where they stand on the 2yr contract you took out on it.
They clearly have a grace period in which you can return a phone if you don't like it.

I'd call them up and find out what you can do.
I take it your N86 was on contract with them maybe?