jeffnz: ot sure if this is off topic a bit if so I apologise in advance. I'm not what you would call wealthy by any stretch of the imagination and liked the idea of a phone for $--- dollars per month, sounded cheap way of getting current phone but the downside was technology changing and for 2 years you are stick with it.
I bit the bullet and bought a SGS2 and went on a monthly scheme no contract which I find great and gives me flexibility to change as required.
Given the availability of credit these days I would recommend buying outright if you can.
Very true, especially since Telecom themselves will extend credit to buy hardware, and simply charge it to your Telecom bill at 0% interest (while still leaving you the flexibility to fiddle with your plan).