Any help or opinion/advice would be so appreciated...

Question

- Original iPhone worked flawlessly for 2 years. In June of this year, began to experience locked screen issues, so went to AT&T store hoping to get a replacement phone. Was told I could not, I had no choice but to 'upgrade', which I did not want to do, as it would recommit me to an additional 2 year contract. But having no choice, I agreed.
- The new phone (3G), gave me issues within the first week. I went back to AT&T (as I was assured when I purchased that I had 30 days to return/replace if needed), only to be told they were so sorry I was misinformed by the sales girl (and that she had done this several times), and they could not help me unless I returned the phone, and purchased again, this time for $50 more, because the sales girl who sold it to me had charged me incorrectly the first time. After an hour of back and forth, and my refusing to pay more, they recommended I go to the Apple store, and try to exchange it there.
- I decided to call Apple support, and explained the situation. The very nice person I spoke to, directed me to the Apple store, telling me he would take care of it, all I had to do was walk in, give my name, and would be given a new phone. So, I went.
- The Apple store, proceeded to give me a 'new' phone, but when I noticed that it came in a white box, I asked the question of whether it was a new phone, or a refurbished. I was given, what sounded like a prepared speech, of how it was against the law for them to sell refurbished items without disclosing them as such, and that the phone I was receiving was NOT refurbished, and only in the white box, 'to save costs on the fancy Apple boxes'. Naive me, asked them if they promised. They said, they promised.
- Within 2 weeks or so, my 'new' (found out by reading these threads it in fact, was not new, the serial number begins with 5), began to act up. Frustrated, I called the Apple support person back. As nice as he was the first time, he patiently tried to help me sort the issues, and instructed me to try restore/reset/etc. In doing so, my phone locked on me. Frustration level elevated now, I decided, enough of this, I am going to just spend the extra money required and buy a brand new phone, as to eliminate this madness and have peace of mind that my additional 2 year commitment would be with a working phone. I left that one plugged in to my Macbook, locked, and headed to the Apple store (45 minutes away, which is why I didn't buy it there in the first place, gas prices are so high).
- Purchased new phone, installed the 3.1 update, and... here we go again. Having similar problems to all those described in the monster threads.
I have been working with the nice Apple support guy for a few days, and he has been very helpful, but despite doing all as instructed, my phone is still acting up. I have 1 day left on my 30 day since purchase and am so torn on what to do. Do I ...
- go back to the Apple store, get a 'new' (refurbished even though they promise they are not) phone, and risk not having peace of mind for the next 2 years?
Or
- Buy a new phone AGAIN, this time, never installing any update until it's well documented that it won't affect my phone.
OR.... ?
My phone is my main device for all I do. I need it working. Am so extremely frustrated right now. Not only have I had to spend money I simply do not have, my 2 year commitment keeps getting restarted every time I exchange/get new. Not to mention, I am charged the activation fee each time as well. *****.
Am new to this support forum, so please bear with me if I've done anything out of order by posting here. And, just so all of you who read this know, I linked the nice Apple guy to the monster threads here, and he did read through them (skimming I assume), so, Apple, at least to my knowledge, is aware of what we are going through.
Thanks so much for letting me off-load. Any help or opinion/advice would be so appreciated.

Answer 1

Thanks so much for your help Allan. If you don't mind, I'd like to respond/clarify a few things...
Allan Sampson wrote:
Apple and AT&T sell the iPhone at the same price. AT&T's subsidized price for the iPhone is the same at an Apple store, an AT&T store, a Best Buy, or Walmart.
I was charged a different price by AT&T (sales girl error), thus why they would not give me a new phone unless I paid the additional fee). I didn't want to pay, as I didn't see why her error should be my responsibility. I had no idea she had charged me wrong.
There is not an activation fee when activating an iPhone exchanged under warranty.
I was charged, all 3 times.
Per the written warranty, an exchange under warranty will be a new or refurbished iPhone with no way to tell the difference between the two. The serial number beginning with 5 does not mean refurbished. An exchange under warranty is provided in a white unsealed box, which is called a service unit and can be new or refurbished.
I guess what bothers me is that they lied to me when I asked.
Having a new iPhone doesn't ensure it will last 2 years with no problems, and having an exchange under warranty which can be new or refurbished doesn't ensure this either and doesn't mean it won't. The iPhone includes a standard one year warranty, which can be extended to 2 years with AppleCare.
Peace of mind is what I was/am looking for, and my experience with Apple up until this incident, peace of mind is exactly what I felt when buying Apple products. It's hard to swallow being locked into another 2 year commitment, not to mention monthly fee being higher now as well, all with a unreliable phone.
A refurbished iPhone goes through more inspection and testing than a new iPhone does at the factory with no way to tell the difference between the two.
I guess it's a matter of principle to me. I don't appreciate being lied to. In regards to the exchange, I would have been more than fine with the refurb, but, they lied to me. This was confirmed to me, when I spoke the nice Apple support guy. He confirmed what I had read on these threads about refurb, and confirmed that the serial number starting with 5 means refurb. He is very nice and very helpful, and agreed that I should not have been mislead like that.
Thanks again for your help Allan. Really really appreciate it.