Current AT&T iPhone 3G costumers who do not qualify for an upgrade need to pay $200 more for the new iPhone 3G S than new AT&T customers.
The new iPhone 3G S with 16GB would then cost $399 and the 32GB version will even have a $499 price-tag.
I totally understand that AT&T charging extra as existing iPhone 3G customers got their phone subsidized. AT&T needs to recoup that subsidy through the life time of the contract.
What I do not understand is that AT&T is not clearly communicating the rules for early upgrade eligibility. According to the NY Times it varies by customer.
You apparently have a good chance for an early upgrade with at the $199/$299 prices if you owned already one of the first original iPhones.
To find out for sure you would need to talk to AT&T support or wait until the rules get distilled from AT&T customer reports.

The AT&T iPhone 3G S upgrade vows come on top of the delayed MMS and Tethering support for the iPhone OS 3.0.