I think Apple is doing this because of slow sales of the 4GB iPhone. So now that they have extracted $599 from the most eager iPhone buyers they feel that by lowering the price they can sell millions more of these phones to heretofore fence-sitters.
Have you been one of them?
Right now the Apple store is down, The $399 price and the appropriate links are back up. should be up soon.
Go there and you'll see this: