Do I need to buy an iPhone 3G to install third-party apps on my iPhone?
No, the iPhone 2.0 update, which will allow third-party software, will be free for current iPhone users in early July; the update comes pre-installed on the iPhone 3G. (If you’ve got an iPod touch, you can upgrade to the 2.0 software as well, but it will cost you $9.95—Apple charges a fee for the touch because of the way it accounts for the device.) The updated iPhone software may be free, but that doesn’t mean you won’t have to pay for individual programs. Some developers are offering apps for free; others charge a fee, with $9.99 seemingly a common price for premium applications based on what we saw at WWDC.