Starting today, the very successful iPhone 4 is just $99 for the 8GB model, pushed out of the top spot by the new iPhone 4S.
As far as we know, the iPhone 4 will remain unchanged aside from the reduced memory and a new Apple model number for inventory purposes. Given the popularity of the iPhone 4 even when it started for $199, we expect these things to fly off the shelves in the next few months.
In addition, the nearly 3 year old iPhone 3GS is simply free if you sign a contract. Despite its age, the 3GS can run iOS 5 when it comes out October 12th, making it an excellent option for someone on a budget.