Prepaid phones are great if you don't need more than talk, text, and multimedia messaging. It's difficult right now to get a reasonable priced prepaid package that includes app downloads like the iPhone or Android Market, but for as little as $10 a month you can get basic voice and texting features (there are limits of course).
One of my personal favorite prepaid plans is from Virgin Mobile USA. It includes 300 minutes, plus texting, picture messaging, web, email, facebook, myspace, and more for $25 a month plus tax. It's a great deal in my opinion.
Most prepaid plans do not require a multi-year contract. You could easily buy a phone and then two month later decide you're not interested in the service. With major carriers in the United States, if you do not do pre-paid, you are probably going to be stuck with that phone and company for two years.