When they say "contract-free" do they mean it is fully unlocked GSM that works with any SIM card? Or that it's "contract-free", but restricted to only one pre-paid provider (such as AT&T)? They need to clarify that.
If it's fully unlocked, then $350 is a very good price. The unlocked iPhone 4 is $650 on Apple's website. Keep in mind that when you buy a phone without a contract, you are not being subsidized by the carrier, and you are paying the full cost for the phone. You may think you're getting a good deal on a $100 iPhone with a 2-year contract, but sit down and think about how much money that will cost you versus buying the phone outright and getting a T-Mobile prepaid plan with a data package. If you use wi-fi a lot, you don't need that big of a data plan anyway.