You are not being charged for anything except edge data, not "downloading apps". It has nothing to do with what you do on WIFI. You just don't quite understand what goes on with an iPhone. It doesn't send and receive data "when you want it to", it does it pretty much constantly every 5 minutes or so. It checks email, it syncs with time.apple.com, it does several processes pinging several places all automatically. You're being charged $500 because you don't have a data plan and don't know all the things the iPhone does that have nothing to do with what YOU do while using it, not because you DL'ed apps on WIFI.
I'd suggest you find a way to get a data plan or sell the phone because you have not been charged for anything related to apps or the otherwise, you are being charged for DATA the iPhone is using behind the scenes which is what it does. It's how the phone works, your time stays "on time", and how your email stays "in the know" as well as a hundred other things that go on all day.
Your provider knows what phone you have, the iPhone identifies itself on a network, they can see you are trying to skirt paying them for a data plan, and they can justify every cent of that bill, so plan on paying it. It'll show the phone connecting about 200 times a day to ping the network for email, time, other processes. The real kicker.... some of those apps "call home" when you turn them on. You're using data with some apps just turning them on. Be glad you are still on 1.1.3 because a much larger majority of 2.0 apps call home.
None of this is the bad news though......... The bad news is that in the time it took me to write this your phone pinged your email server at least once, and connected to time.apple.com once, then ran two system processes and pinged the network a few times........... and just ran up another $7.50 on your phone bill.
