The extra line will cost $240 over 2 years, so that's $120 per year.
If you wanted to early upgrade this year it would be the cost of the phone (we'll use the 16GB iPhone) $199 + $250. This would extend your contract another two years, as well as push your upgrade date back.
If you wanted to get the iPhone next year, you would have to do another early upgrade since you signed a new contract the year before. So that's another $199 + $250.
Adding a line ensures you have an upgrade available every iPhone release, all at a cost of $120 per year. If you go the early upgrade route, it'll be $250 per year.