They signed a new two year contract when they upgraded to the 3G iPhone. Every time you make a change to your account with any carrier: new phone, changing rate plan, adding features - you sign a new contract starting on the day the changes take effect.
If you don't believe me, log into your (insert carrier here) account, change a feature or add something and before you submit the changes to take affect read the fine print. I one worked for AT&T and all carriers do this.
On another note Warbrain, you're wrong about AT&T's network not being able to handle video calls. Take your same 3G iPhone, tether to your Mac and feel free to tell me how well iChat works for you. AT&T is simply not willing to let a competing service on their network unless they're going to make money off it.