The iPhone 3G is the second generation of Apple's revolutionary keyboard less phone. Out is the brushed metal back and "2.5g" edge network capability and in is a hard plastic back and 3G hspda network connectivity. What else, you ask? You add a hardware GPS for accurate location services, longer battery, a slimmer looking (but not all that much slimmer) tapered back and perhaps most importantly, a major price cut - the 8GB iPhone 3G retails for $200 (with a two year contract).
Those all sound like good things, but its not all peaches and cream. With the $200 price comes a more expensive data plan, $30 a month minimum without any text messages; up from $20 a month including text messages. This more than entirely negates the "price drop" that Apple has so vocally chanted.
So, how is it? I'm a fan. Price wasn't an issue when I paid $600 for the original iPhone, so $200 with a little plan hike isn't keeping me off food for a month. The new back material is an improvement (it doesn't dent when you look at it funny) but it still scratches, so a skin or case is a good idea if you're the shiney gadget type.
All in all, you should definitely weigh your options before trading in your old iPhone for a new model. If you are a new AT&T customer or don't already have an iPhone, go for it! Its the bees knees.