If I break my phone, how do I get a new one?

I tend to be a bit clumsy with my phone and drop them pretty often. I'm currently get rid of my Nokia E71 because the camera function no longer works. That being said, my buddy has a spare 3G Iphone that he could give to me. Lets say I break that one 6 months from now, how do I go about getting a new iphone? Do I buy it from the store and renew my contract for another 2 years?

If the phone isn't totally destroyed (beyond economical repair) you can get a service replacement from Apple without having to renew your contract or pay the full unsubsidized price.
Pricing details will vary by country, but are listed in the iPhone Service FAQ under Out-Of-Warranty Service section for the USA:
http://www.apple.com/support/iphone/service/faq/#warranty7

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