AT&T said you will be able to purchase the iPhone with no contract "soon" for $599 for the 8GB version or $699 for the 16GB. If you're planing on sticking with AT&T I'd say get the upgrade price if you can because that monthly bill is going to be pretty expensive on top of that hefty entrance (no commit iPhone) price.
Whether its an AT&T or an Apple Store, as of now you HAVE to buy it with a contract. AT&T is thinking about about doing a deal where you can purchase it without a contract but its around 6 or 700 dollars. Its not official that they're going to be doing that. Its a possibility.
Edit: Sorry, was posting this on the iPhone at the same time.