I wrote the following as a response to a reddit questions about whether anyone had cut the chord on their cell phone plan.
I recently torched my ATT iPhone contract. I was out of contract. I transferred my cell number to a cheap ($20) T Mobile pre-paid phone and popped the sim in an old T Mobile Motorola Pebl.
I went with the $15/month unlimited text and $0.10/ minute talk plan. I use the Pebl for talk and text. My iPhone 3GS became my glorified iPod Touch.
Funny thing is I still use my iPhone pretty much the same way I did before at home and work where I have wifi (also at Starbucks, Barnes and Noble and at the library).
The best find I made was the iPhone app Talkatone. It connects to your Google Voice account and allows you to dial calls for free where ever you have a wifi signal (some set up in your Google Voice settings required.)
Sure testing in the Pebl is cumbersome compared to the iPhone but where as I was paying $95/month before I am paying $15/month plus a few bucks/month to top up my voice minutes for things like work calling etc.
My original plan was to work this set up for 6-12 months to save up for an iPhone 4S but I am not missing this much as I thought I would without a mobile data plan.
I may still get a new iPhone but living so cheap will make hefting on an expensive 2 year contract look less and less attractive.