I just came back from my local AT&T store to speak with a rep face to face about this promotion. Here's what he confirmed with me:
-iPhone on previous Next Plan must be paid off before you preorder the iPhone 7 on your new Next Plan
-Free iPhone 7 is based off of the lowest variant (iPhone 7 32GB)
-Customer pays difference based on the variant they want
-The promotion is automatic, once you receive and activate your new iPhone, you will receive a text message with promotional offer details for trading in your device
-Currently, the promotion has no end date.
-Even if AT&T establishes an end date, as long as you pay your current iPhone off on your Next Plan and complete a preorder before this happens, the promotion will still be honored.
Hope this helps anyone with questions. If there's something I left out or didn't address, let me know.