I think it is going to be an iPod Touch with 3G, a video camera and OS4.0 for ~$300. I haven't heard any rumors of it yet, but I think it can be disruptive.
Edit: iPad without 3G is $129 cheaper. iPod Touch is $229 cheapest. Adding a 3G chip to it should make it <$350.
What you want is a unlocked iPhone and providers which offer some sort of prepaid SIM. And that very likely won’t happen.