I completely agree with Brett Kelly that the one-time savings of buying an older iPhone aren’t worth it.
Over the course of a two-year contract, you’re going to spend $2000+ on service. The $100-$200 you’d save by going with the 3GS or 4 is a poor trade in relative terms. Buying an older phone just means you’ll get less value out of the service, which costs the same no matter what.
Reminds me of the irrationality of avoiding apps that cost more than $0.