re: contract phones.... they're still tied to carriers, no? I don't think I can use that no-contract iPhone on any other carrier than AT&T, can I? I really don't know. It's insulting to have to pay that 'subsidy' markup when in fact I can't use it on any other network anyway.
You can use any unlocked tri-band GSM phone as a phone on any GSM networks, but many of them use different bands for 3G. In the US, the only other GSM provider is T-Mobile, which doesn't share AT&T's bands.