Used "2G" iPhones selling like hotcakes

Think you can score an original iPhone for cheap on eBay? Think again.

A quick search on eBay reveals that iPhone "2G" (as opposed to that new, 3G version everyone's complaining about) auctions are closing at anywhere between $300 and $500—and that's for the 8GB model, not the 16GB version.

BusinessWeek reports that tech reseller NextWorth.com is paying up to $300 for "gently-used" 8GB and 16GB iPhone 2Gs. And on Craigslist? Here in the New York area, the old 8GB model is going for about $400, and the 16GB version is selling north of $500.

OK, so what's going on—who would pay $500 for an original iPhone, given that the new model sells for just $199?

Well, between complaints about spotty 3G reception on the new model, poor battery life, and cracked cases, the iPhone 3G has been taking a beating since the moment it launched.

Meanwhile, the older model is still capable of running the latest iPhone software—including programs from the new iTunes App Store. Also, its aluminum backing is imperious to cracking, it packs in Wi-Fi for speedy data access (no 3G, but my new iPhone is barely getting 3G access anyway), and you can unlock it for use on other carriers (hackers have yet to build a reliable, software-only tool for unlocking the iPhone 3G).

So if you've got an old iPhone you've been looking to unload, well ... now's the time. In the market for one? Prepare to get gouged.

Related:
What's Hot: Used Apple iPhones [BusinessWeek]