I was a former AT&T Cingular customer until yesterday. Someone stole my old, busted up phone. I had another of the same phones, with an AT&T sim that used to be assigned to my wife. Cingular told me they couldn't reassign the sim to me, and suggested I go to the store and buy a new sim.
At the Cingular store, I was told that because they no longer have AT&T sims, I would have to sign up for a new 2 yr contract, and buy a new cingular phone and sim. I told the salesman what I really wanted was an iphone, so I'd just take the sim and buy an unlocked phone to tide me over until the iphone come out. He explained that I wouldn't be eligible for the upgrade price if I didn't buy a phone now. He suggested I call customer care and see if they could offer me anything.
The thought of spending time on the phone with Cingular's reps and working to remain their customer just seemed silly to me. I went to Amazon, bought a Blackberry Pearl for $50 (free after rebate), and switched to T-Mobile.
On a side note, if you do follow the links to break the contract and flip to month to month. Consider getting the phone through Amazon. Their rebates are typically much greater than anyone else.
Just FYI, I'm fairly sure those Amazon prices are usually only for new customers, not for existing customers extending contracts.