It's been well publicized that the iPhone requires a 2 year contract for activation, and that the other iPhone functions (iPod, Internet) are unusable without proper activation.
That hasn't stopped people from trying to activate the iPhone otherwise, or to get an off-contract plan.
Earlier reports from AT&T documentation revealed that iPhone would be offered with "Pick Your Plan" contractless rates for customers who don't pass the required credit check.
The catch for these Pre-Paid plans is that the Pick Your Plan monthly rates offer significantly fewer voice minutes than the 2-year standard plans. So, the only users that should be actively interested in this option would be those who plan to use very few voice minutes and wish to remain contractless.
TUAW provides the "work around" to qualify for the Pre-Paid option. Simply enter "999-99-9999" as your social security number during activation.
Widescreen iPod / Wifi
For those interested in simply having a Widescreen iPod / Wifi internet with no mobile phone, Gizmodo posts unconfirmed instructions on how to do so. Again, these are unconfirmed so you should proceed at your own risk. (And you need 2 iPhones)
1.) Obtain 2 iPhones
2.) Plug in iPhone #1 In iTunes select "I am a new AT&T Wireless Customer" and "Activate 2 or more phones on an individual or FamilyTalk Plan."
3.) Follow the steps for the FamilyTalk plan and enter "Cell Number X" to port a number over from another provider (e.g. Sprint)
4.) When the you receive the "Activation Complete" e-mail, plug in iPhone #2.
5.) Select the option "I am an existing AT&T (Cingular) wireless customer" and "Replace a phone on my account with this iPhone"
6.) Fill in the information re-using "Cell Number X." Allow the iPhone #2 to activate using this number. This number will be legit.
7.) Plug in iPhone #2, it will unlock the phone for use, but without a cell phone number assigned or account from AT&T.
Efforts are underway to try to create an unlocked iPhone. Despite some claims on the internet, there's been no evidence that this has been successfully accomplished.