So here is what I experienced in my quest to avoid paying the extra $200 charge ATT wanted to charge an existing customer, who had received a discount on another phone in the last 2 years. I was not eligable for the incentive discount on Iphone 3g launch day. I purchased a 8gb iphone (refurb) off of craigs list for $225 on aprox 7/20. I activated the iphone on my account using itunes from home. I went to an apple store a few days later and tried to get the 3g, while their system still reported me as not eligable for the incentive price, they insisted that as a current iphone customer I should be eligable for the "incentive price" discount. Today on 8/5 I went back to ATT and physically showed them my iphone. I informed them that it was purchased before, but not actived on my account until after the 3g launch. I told them that since I was a current Iphone customer I wanted my discount. (Think about it all 1G Phones that have not been refurbed since the 3g launch should reflect a purchase date prior to 3g launch). They filled out a upgrade fee exemption form of some kind that got emailed to the corp office, which got approved within 30 minutes. I then was able to put in my mail order request for a 16gb iphone 3g for 319. Requirements 1. you have to get your hands on an iphone and activate it upon your account (either buy, borrow, or handed down). 2. you may need to wait a few days for ATT system to properly reflect your iphone. 3. You are required to go to ATT Store to request a waiver so that you can get your incentive priced discount (AKA SAVE $200). 4. you will have to wait for the phone to be shipped to ATT. On the surface I paid $225 to avoid paying ATT $200. However, for only $25 more then originally asked to pay for the 3G, I now also have a 1g out of the deal. I can keep it as a backup, pass down to a friend, or resell.