This was discussed recently here:
http://www.cheapassgamer.com/forums/showthread.php?t=335503
It really does depend upon how much you plan to use the phone. My area of expertise is in finding the absolutely lowest per-month cost for service, assuming that you don't actually use the phone very much.
If this is the case, I'd recommend either Tracfone, or T-Mobile prepaid.
--------------------------
For Tracfone, you want a phone with triple-minutes-for-life. Just search Amazon for "tracfone triple". You have basically 6 choices:
LG 530G - basic Blackberry type phone that has pretty good reviews
Samsung S390G - basic Blackberry type phone with WiFi but with mixed reviews (butt dials 911)
Samsung S425G - well-reviewed QWERTY slider phone
Samsung T301G - basic slider phone (no QWERTY though)
LG 800G - Terrible touch screen phone (everyone hates this phone)
LG 840G - New replacement for the hated 800G with WiFi (reviews are mixed)
Note that NONE of these phones are smartphones. The LG 8?0G's may look like smartphones, but they are not. They have touchscreens, but that's about it. This makes the usefulness of WiFi negligible IMHO, so I went with the LG530G.
To get the cheapest per-month service with Tracfone, you want to buy 60 minute cards. These are $20 each at retail and come with 60 minutes of airtime (duh) and 90 days of service. With your triple minutes phone, the airtime is bumped up to 180, and I've NEVER failed to find a code for at least 20 bonus minutes, so that's 200 minutes per 60 minute card redeemed. If you do the math, that works out to ~$6.67/month with a monthly allotment of 67 minutes (texts cost .3min each in or out). Your minutes roll over indefinitely, as long as you keep your service active, so months when you don't talk very much can feed time when you talk a lot. If you need more minutes than that, you might be better off buying the larger sized cards, but I haven't done the math on that.
Get your Tracfone bonus codes here:
http://www.preprepaid.com/currenttracfonebonus.php
----------------------------
For T-Mobile, what you want to do is get a T-Mobile prepaid SIM card. I just called T-Mobile and ordered one directly from them. They only charge a dollar or two for them. You can get either a regular or micro SIM, depending on what kind of phone you're getting.
You also need to get a phone to go along with this SIM card. I put mine in a Nokia C3-00 and it works just fine. I'd assume that most any unlocked GSM phone (smart or otherwise) would work, but you might want to check with T-Mobile (or Google) to verify compatibility before you shell out good money for something. Of course, T-Mobile will sell you a phone to go with your new SIM as well.
Now for T-Mobile service, what you want to do is redeem a $100 service card right off the bat. This gets you a year of service and "Gold Rewards Status." During your year of service, you are drawing off of your $100 airtime credit at ($.10/min for talk and $.10/text). Now HERE IS THE GOOD PART, when your year is almost up, all you have to do is redeem a $10 card online (reports are this is the only way it works) and you get $10 added to your airtime credit (of course), but your service and Gold Reward Status are extended FOR ANOTHER FULL YEAR (so you don't have to buy any more airtime if you still have some left over and if you need to buy more airtime, you keep your $.10/min rate). Over time, your monthly cost can get crazy low, assuming you don't talk very much.
Here are the pay as you go rates from T-mobile:
http://prepaid-phones.t-mobile.com/pay-as-you-go-plans
Here's the discussion about renewing your Gold Status as cheaply as possible:
http://www.fatwallet.com/forums/deal-discussion/937850/
The T-Mobile prepaid service has some other nice features as well....
First, you can switch up your prepaid plan willy-nilly on a day-to-day basis through their online account management feature, so you can go from the usual $.10/min to a pay-by-the-day plan where you pay $2 for the day and get unlimited talk/text/2Gweb.
Here are the pay-by-the-day plans:
http://prepaid-phones.t-mobile.com/pay-by-the-day-cell-phone-plans
T-Mobile also seems to have robust international calling/roaming (but you pay through the nose for it, but nice to know it's there if you need it)
Hope that helps.