I had a first gen, which suffered from a screen problem. I had it in a box until a few weeks ago, when I saw a notice from Apple (Apple TS1827 or something) which explained that Apple would replace/repair out-of-warranty iPhones suffering from this problem (so long as they fell within a certain serial # range, which mine did). Bottom line: yesterday Apple gave me a NEW iPhone 2G. I'm pretty sure it is NOT a refurb (1. it doesn't have a scratch on it -- completely mint and 2. the serial # indicates that it was built in June of 2009).
If you're interested, feel free to make an offer. Otherwise I think it's going on eBay. I think it would be fairly tough to find a first gen in this kind of condition.