Thanks andreww for the anwers.
I did end up getting an iphone 3GS. I'm not bothering with the data plan, and just going to use wifi. My friends with iphone plans are jealous, since I'm only paying about $50 a year for phone and text usage while they pay at least that much every month. SpeakOut rocks !
An update answer for my own questions:
1) I got a Rogers locked iphone and it worked immediately with no modifications. I just popped in my SIM and away I went.
2) I'm on version 4.2.1 and everything works great, no worries about the version. But if you want to check what version the phone is go to Settings/General/About/Version.
3) Yes you can turn off the data in Settings/General/Network/Cellular Data (switch to off)
4) Most Navigation GPS program apps for the iphone need to either have constant Wifi or a Data plan to update the maps and directions as you drive. I did however find a free Navigation GPS app that will work without wifi or data (referred to as off line). The app is called NavFree USA. When you install the app it includes North American maps saved on your phone. The app is between 1 to 2 Gigs. It will work using just the GPS capability of the iphone. It shows your current location while you drive, gives turn by turn direction and updates directions on the fly just like TomTom or Garmin and its FREE. It currently has limited maps for Canada. I can confirm that It does currently cover the Golden Horseshoe and Windsor in Ontario. This was my most happy discovery. I now have a wifi web-browser / phone / Navigation device all in one.
5) When shopping for an iphone ask if it still has warranty. If they will tell you the serial number you can enter it on the apple website and it will tell you when the warranty expires. You don't need a password or anything just the serial number. I bought mine with 8 months warranty left, which gave me peace of mine if any issues come up I can get it fixed.