First of all:
iPhone will work on any GSM carrier; that’s the whole purpose of standards like GSM, and iPhone is a GSM phone. Network-specific functionality (such as visual voicemail) will not work, but the phone and basic voicemail functionality, data functionality, etc., will.
Alternative US plans explained here: Prepaid: Cell Phone Plans for the Rest of Us
The essence of that though, is this: The iPhone is not officially offered as part of AT&T’s pay-as-you-GoPhone, but the service becomes available if the credit check at activation in iTunes fails apparently. You can force a failure by entering 999-99-9999 as your SSN. The prepaid GoPhone packages available for the iPhone cost upward of $49.98.
But here’s le boef: you can use the SIM card (and plan) from another AT&T/Cingular phone in your iPhone. If you’re not faint of heart, here’s the hack. And here’s the tutorial at (bless ’em) hacktheiphone.com
But the furure of that is already (here), namely:
Apache, Python and other Open Source apps for the iPhone have already been built by our fearless revolutionary freedom hackers. Yes, your iPhone can now be a web server and do all sort of 1337 things. This also means that third-party applications for iPhone will happen no matter what. And progress on iPhone unlocking too.
The iPhone Dev Wiki rebels are now in their final assault to get the iPhone fully free of the Evil AT&T Galatic Empire:
more of that here