This is fantastic news...for me.
My contract was up a few months ago, and I wanted to re-up so I could get an iPhone 4 (16 GB, $199). But I decided to be patient and wait for this announcement to see what Apple was actually going to do. Now, I can get the same iPhone 4 for $99. I just saved myself a cool hundred bucks! (Yeah, it's only going to be an 8 GB phone, but I don't care about that). Hell, I'd even get the iPhone 3GS now that it's free, but I'm too worried that it won't run iOS5.
But seriously...what? A faster processor...for what, exactly? An 8 MP camera as opposed to a 5 MP...but it could be 20 MP...it's still a shitty cell camera, just like all cell cameras. Voice recognition software that's two years old...again, for what?