According to Tracey and Matt’s blog this is the deal
The first “GooglePhone” will hit the streets of the US for $199 next week. It’s a T-Mobile exclusive (For now) and will require a service agreement with T-Mobile. In simple UK speak: its on contract, not PAYG.
Despite that, it does appear the phone is going to cost a lot less than the iPhone – but that’s dependant on what sort of contract you will be pushed into.
Oh and the HTC Dream / GooglePhone has now got a proper name – maybe. Rumours suggest ‘T-Mobile G1’ is the rather unoriginal name.