full unsubsidized retail price (no contract required) is $499, iPhone 4 16GB is only 100$ more, at $599.
with a 2 year contract its $99, and iPhone 4 is only 100$ more, at $199.
Seriously, if youre willing to pay 500$ for an iPhone 3GS, its a joke to not just pay 100$ more and get the iPhone 4 which will also have double capacity.