PalmAddicts did a wonderful comparison of the prices of the iPhone against the Treo 680 over the course of 2 years.
It turns out that because the service plan of the Treo 680 is about $20 more expensive per month then the iPhone is for the same service the iPhone is cheaper, even though the Treo 680 is free!
The Treo 680 with a 4GB SDHC card will cost $1,980 over two years while the iPhone will only cost $1,940. Now the difference isn’t that big and if you look at the 8GB iPhone compared to a Treo 680 with an 8GB SDHC card it will be more expensive for the iPhone. If you look at the pricing over 3 years the iPhone is cheaper across the board.
Check out PalmAddicts full rundown of the numbers over here.