If you got a contract with AT&T say 1 years ago and you just updated to an v1 iphone within the last 2-3 month you are still obligated to that 2 year contract (so you would have x months left on that contract) if you got a phone at a discount through AT&T. Buying an v1 iPhone does NOT make you eligible automatically!!! I just got off the phone with a manager at the call center and that is one of the reasons why some of the contract are going to ineligible. And that makes perfect since... I went from a pay as you go phone to the iPhone v1 so I am eligible for the 3g iphone at 199/299 (in other words I did NOT use my discount). If you started AT&T with a phone that you got a discount on you have to finish that 2 year contract or pay the high 299/399 price. Make perfect sense to me. People are saying to use someone elses iPhone to make your account go to eligible....that will or might work when you look online but they are going through and verifying that you did not have a 2 year contract prior to getting the v1 iPhone. If you still do have time left from your original contract with AT&T, when you get up to pay you will be very surprised if they catch you.... I guess you have a 50/50 shot...

My sons iPhone was given to him by me when I updated to a 16GB but he still has 1 year left on the original 2 year contract so he is NOT eligible even though its an v1 iPhone!!!!!! Make sence, if not call and ask.

Good Luck