Want an iPhone badly, but find yourself too turned off by the steep price? Well, if you are willing to pick up where someone else left off you have a shot at grabbing a refurbished iPhone for significantly less than retail. That is, an "Apple Certified Refurbished" iPhone, which Apple will warranty for one year.
Despite the iPhone being a very new product, Apple is already selling these, offering the repaired units at $100 off retail. That would be $499 and $399 for the 8GB and 4GB units, respectively. Considering they offer a warranty on the units and even the optional AppleCare protection plan, going after one of these would probably be a safe bet - if you're willing to buy such an expensive item used, that is.
Obviously this sort of offer is limited to units that have been returned and repaired to begin with, so it may not be a permanent offer from Apple.