The upfront cost, the first month or initial payment, of the iPhone is now about $190 cheaper. However, monthly service cost is now $10 more expensive than before, so $70 instead of $60 per month. Over the 2 year contract, the total cost of the phone will be about $50 more expensive plus a little bit more depending on taxes and fees.
In other words, for the iPhone EDGE, you had to pony up $399 + $60 + other fees to have it in your possession; then, pay $60 + other fees for the next 23 months. For the iPhone HSDPA, you have to pony up $199 + $70 + other fees; then, pay $70 + other fees for the next 23 months.
So cheaper to get the first month, but more expensive every month thereafter. However, you could get up to a 3x increase in web-browsing speed, so it's a decent value. Of course, if you don't fall in a "3G" zone, you won't get that, so the value of the new phone won't be as great (still better as it will have GPS). If that's the case, I'd really really really would try to negotiate for the old iPhone contract.