I shipped my 16GB back to Apple yesterday.
Long story short, they told me I had to return the 16GB and wait to become eligible for the 32GB (to get my discount again.) They couldn't allow me to exchange the 16 for a 32, which I find ridiculous. Spoke to 2 different reps, a manager, and the outcome was the same.
All in all, they have to receive my 16GB, process the return, and then AT&T has to do whatever the hell they have to do, in order for me to repurchase the phone.
Truth be told, I would've kept the 16GB, but the 'pale' screen would've driven me nuts. Since I figured I was going to exchange it anyway, might as well go for the 32. (I should've just bought the 32 to begin with.)