OK, I'm sort of out of luck on this one because I STILL am using my original iPhone, but if you have a iPhone 3G model and you're interested in upgrading to the new 3G S series that are coming out June 19, you can recycle the old one through a promotional program being run by tech recycling and reburbishment company NextWorth.
The company is offering as much as $255.50 as the trade-in value for a 16GB iPhone 3G (in almost new condition, with all its accessories). Basically, you go to the site and enter information about the state of your device, and NextWorth will produce a guess-timate of what it will pay you. You get your trade-in money (cash, PayPay or gift card) within 14 days of sending in the product. You'll get less on a trade-in if you've, ahem, more than gently used your phone. Like me. Anyhow, here are more details on the program.
NextWorth also accepts BlackBerry phones, digital cameras, GPS gadgets, video games games, video game consoles and iPods.