If you’re planning to upgrade (or even just changing your AT&T plan), I’d suggest watching out for these and possibly other charges:

• $18 “Upgrade fee” – Hmm, I don’t remember anyone telling me about this when I was checking out. Nor do I see it itemized on my Apple receipt, just an iPhone, a dock, and some California sales tax. I guess I can’t complain too much though, as we did mention it on Engadget.
• $12.64 in various new taxes – The new phone also came along with another $12.64 in taxes, more than doubling my previous months’ totals to an even $25. Included in these numbers is a new ~$11 in California state and city taxes which (surprise!) come on top of the $25 in CA taxes I already paid at the time of purchase.
• $56 in SMS charges – This easily hurt the most. My rate before was $0.05 per SMS, so I knew if I went over my original iPhone’s 200 SMS allotment, I wouldn’t be pinched that hard. I also knew the base 200 SMSs were going away with the iPhone 3G plan, but it wasn’t ever mentioned that I’d have to take a new SMS rate, too — let alone one that amounts to a 4x increase. (FYI: even 5c per SMS is a HUGE margin for AT&T.)

Of course, some of this could be mitigated. For instance, if I’d have been informed that there was a $5 / 200 SMS plan at the time of purchase I could have saved a good chunk of change on those two-dime messages. But I was only told of a $20 unlimited plan (which I declined, proving to be a dumb move on my part). The surprise would also have been dulled if customers were properly notified in-store, or simply presented itemized plan and rate changes (like the 4x hike on SMS), as well as other various service charges on its receipts.

Of course, at a certain level it also comes down to doing plenty of pre-purchase consumer diligence and not leaving anything to chance, right? Still, overall experience: poor.