I went to the Apple store and AT&T to find out the policy since I had a 3GS and I was eligible for the new i4 with a discounted price, so I bought an i4 on release day however there are way too many bugs and issues, so I thought I would return it until everything is worked out. This is what I found for those who are interested. I have the locking up issue after a call or when I try to switch between apps, also the Signal issue and all they tell me to do is buy a bumper even when they are sold out 
Apple and AT&T will take the phone back and re-activate my 3GS however you need a new SIM card because the one you had in your 3GS is no longer good. Apple returns your phone, then you have to goto an AT&T store get a new SIM then they activate it, also show AT&T your i4 return slip they will put your contract back to where it was before you purchased the i4
Apple and AT&T will take the phone back and re-activate my 3GS however you need a new SIM card because the one you had in your 3GS is no longer good. Apple returns your phone, then you have to goto an AT&T store get a new SIM then they activate it, also show AT&T your i4 return slip they will put your contract back to where it was before you purchased the i4