You can now pick an iPhone 3G or 3GS from any Apple Store without the need for a two-year contract from AT&T, according to 9to5Mac. AT&T also offered no-contract iPhone 3Gs (before the release of the 3GS) last year.
The contract-free phones include the 8GB iPhone 3G for $499, the 16GB 3GS for $599, and the 32GB 3GS for $699. Apple is also limiting customers to one contract-free phone per day. Despite the hefty price, the phones are still locked to AT&T's network, so buyers will still need to jailbreak and unlock their phones in order to bring them to other cellular carriers. In the US, an unlocked iPhone can run on T-Mobile's network -- although without 3G connectivity.
While many are considering this contract-free offering a response to Google's Nexus One phone -- which is available without contract for T-Mobile and AT&T, and soon Verizon and Sprint -- the fact that Apple and AT&T made a similar offering this time last year is telling.
We're only a few months before the launch of the next-generation iPhone, and it seems more likely to me that the companies would want to clear out as much of their old stock as possible. While the iPhone 3GS may stick around for some time, I'm fairly certain the 8GB iPhone 3G will disappear when the next iPhone launches.
Perhaps this time around, though, Apple may actually stick with the contract-free attitude once the next-gen iPhone hits. It's far too early to tell, but if it does then that would be the response to the Nexus One that everyone is looking for.