IPhone functionality once contract expires?

You would still be able to use it as an internet(wifi only),mp3 player, camera, and so on. You will just lose it’s phone function.

Check out Hackthatphone.com it has some great info on jailbreaking/unlocking.
You may also approach AT&T about unlocking your phone, they have the codes, question is will the give it for the iPhone… They did for my blackberry. Goodluck.

I know someone who has a 1st gen iPhone who still uses it for everything except phone calls. He even still somehow has an internet connection on it. It will still work just fine :)
Edit- now that I thought about it, his is jailbroken. Sorry.

@elijah ~ so will it still be able to surf off my wi-fi at home for example? Can anyone answer that question with certainty? If it still has the ability to run on the wi-fi network, will I still be able to use the mail function?

Thanks for all the answers so far, you guys.

Yes, it will still have the function of WIFI cause I used my brother’s iphone when he canceled his service.

His still uses wifi at his house and mine, and he gets and sends mail. I will ask him if it only works because it was jailbroken. Even if it isn’t jailbroken I know the iPod/apps still will work.

@elijah ~ thanks

You should absolutely be able to use all its functionality except the phone part if you do not have an account any longer. None of that functionality is tied to the phone network.

Having said that you should have multiple options available to you to keep the phone working as a phone as well;
1) ATT unlocks it for you. You met the terms of the contract it should be unlocked. You could then use any other carrier and any plan for your service.
2) Renew you ATT account. You can choose any plan… it does not have to be the iPhone plan. You could even go with pay as you go. Just be careful when using the data part (internet, im, some games) as like text messages the charges can add up if you do have a limit vs the unlimited data plan. You may be able to get a data plan only… although that I am not sure.
3) Jailbrake/unlock the phone and use a different carrier. Again, the contract has expired so this is now not an issue of violating the terms of that contract.
4) And of course you do not have to renew at all… you can use the device much like an iPod touch

Note if you do go with a different carrier the visual voicemail functionality will not work.

As others have pointed out, you can still use WiFi for Internet access, and use all the apps and non-phone/Edge features. It has been this way since the beginning—simply remove your SIM card to see for yourself.

He says it will work :)