----EPIC NEWS----
I just returned my OUT OF WARRANTY iPhone 2G, 8GB in for a refurbished one... for free!!!
NOTE: Written a bit out of order; read the whole thing before starting.
I'm sick of people saying **** without explaining, so here's how

:
1. I bought a SIM Card at my nearest AT&T store.
2. Put it in my iPhone, and got a "network timed out" error when I selected an iPhone contract and went to the last step and pressed "Submit".
Note: Some people say you have to fail the credit check or something by entering a fake SSN (social security number). Mine just didn't work, and brought me to a screen with 3 options.
3. Press the option saying something about "pre-paid". Go through the process and you should have a pre-paid phone number for your iPhone.
4. You now have an iPhone with a valid AT&T number, which means it is eligible for replacement (even if you are out of warranty, and you have a dead strip).
5. MAKE A RESERVATION at your local apple store (Via:
Apple Retail Store - Genius Bar).
6. Go to the apple store and tell them your problem (dead strip).
MAKE SURE YOUR iPhone is Virginized (not unlocked or jailbroken).
And like someone said earlier: In 15 minutes, you'll have a refurbished iPhone. The guy I talked to just asked a few questions, and he asked if I tried restoring the phone, I said yes.
Enjoy, and hope this helped.
