They have a procedure for this and everything but be patient with them as they are just getting up to speed. If you are still within the 14-day return period, take in your original receipt to any corporate owned store and they will waive the 10% restocking fee and credit $200 plus applicable sales tax to either your AT&T phone service account or the credit card you bought the 8GB iPhone with (or work out cash or check refund as per AT&T Store policy if you paid cash or check). You don't need your phone, just the original receipt dated within 14 days. They will not make you swap out your iPhone and reactivate a new one. You get to keep your current iPhone.
If you are returning the iPhone and canceling, you'll still of course get the $599 price refunded, but you will have to pay the 10% restocking fee.
I'm just going to have them credit my AT&T account so I get almost three months free phone service out of it.
But I repeat, if you bought an 8GB iPhone at an AT&T Store within the 14-day return period, you get $200 + sales tax on that amount back, with your receipt, no iPhone swap out, no reactivation hassle.
If AT&T used to suck, they don't anymore, let me tell you.