Will this contract workaround get me an iPhone 3GS at discount price?

I have the current iPhone 3G and want to upgrade, but as you can imagine, I’m not willing to pay $599 or $699. So I have devised a plan. My friend wants a normal 3G 8 gig, and that’s exactly what I have. I recently exchanged it because the old one was broken. So this is my plan:

Have friend buy iPhone 3GS at discount price. Then give them the money for the iPhone 3GS and sell them current iPhone, then just swap out the SIM cards.

Will this work? Or do they use different types of SIM cards?