Of course AT&T gets wholesale price.. and I've no idea how further south those would be below Apple's $599 & $699 price points. I'm guessing $400-450 as the price for the base model would be about right..

Mobile me is $99 per year direct from Apple and around $65 if you buy from Ebay. Or $149 for the family pack (5 users), which is $100ish from Ebay. The value is really low compared to what kind of money people spend on their mobile packages, which allows device+mobile subscription bundles to be attractive to many people.

I, too, 'dream' of the day that mobile voice+data plans become lower priced\reasonable flat rates. But realistically, this won't happen overnight or done by a single device. Love it or loath it, iPhone is a great step in that direction as they've brought a sizeable userbase which would probably be ignorant of packet data without the iPhone.