http://www.dealextreme.com/
They sell iPhone headphones with the in-line mic and button for $3.50. I mixed my Deal Extreme headphones up with my real Apple headphones, and no one I've been able to find can tell them apart.
Believe it or not, you can buy headphones somewhere other than the Apple Store.
It wouldn't surprise me if they start stocking these headphones at a similar price in the near future.
Okay, you got me, that looks AWESOME. Even the reviews are good.
http://www.dealextreme.com/details.dx/sku.11599