I think I'll pass on this "discount."

I logged into my AT&T account today to pay my bill and just out of curiousity hit the Check Upgrade Options link. It's pretty obvious that new iPhone hardware is on the horizon, but I was curious what kind of deal AT&T might offer on an iPhone 3G now that I'm approaching the halfway mark on my existing contract. And here's what they had to say.

As a valued AT&T customer, we can offer you a discounted iPhone upgrade at a higher price, along with a 2-year commitment and an $18 upgrade fee.

Admittedly, I'm no rocket scientist, but "discounted iPhone upgrade at a higher price." WTF does that even mean?