Or, you pay $175 to cancel the contract and pay $199 at AT&T for a total cost of $374. The $450 is just one of your options, not the only one.Well if I pay $175 to cancel the contract and pay $199 at Verizon it will cost me $374... If I buy it with an early upgrade discount at AT&T it will cost me $450. So it is cheaper to leave.
You can also sell your iPhone 4 (get, say, $350-$400) and then buy an unlocked one for $650 and keep your current AT&T contract. That will cost you a net of $250-$300 depending on what you get out of your 4.
I do think they'll bump eligibility, and I plan to take advantage if they do. I bought my iPhone 4 in November 2010 but for whatever reason I'm eligible for upgrade 11/6/2011 - even though I did a 2 year contract. Don't know why, but I'll take it - if AT&T doesn't move up eligibility, I don't have long to wait.