Since nobody actually answered the question the OP asked (at least nobody that's done it), then I'll do! I got my 16gb iPhone doing just that. I went to the Apple store, signed up for the iPhone for $299 up front. After a month or so of service I called in and just told the rep that I wanted to cancel the contract. The only question he asked was if I knew someone who would be willing to take the phone (and contract) so I don't get get charged the ETF. I even misplaced the ETF bill and paid it a month late (you can't pay it online) and wasn't even charged a late fee. So it's actually far more simple than people are making it out to be. The total was $299 + $125 (first month + activation + taxes) + $170 (ETF) = $594 total.