The 4GB iPhone 1 was $499, with contract. The 8GB iPhone 1 was $599, with contact. A few months after launch they lowered the price by $200 and gave store credit to the people that paid the higher price.
It was £99 iirc in the UK but you had to get it activated in-store for a seriously pricy contract. Until somebody worked out how to jailbreak it, at which point it was the bargain of the year.
