Armchair Traveller :(
I don't know about other towns... but here in Ahmedabad there is a store that exclusively sells iPhones from 2G to 4G. He has new phones as well as the so called new phones. Though he doesn't give any warranty, he assures of repairing any trouble.New iPhone 3G isnt available so checking it out is ruled out. Very difficult to trust a reseller.
BTW I bought my iPhone from him and its working fine. No issues so far.