I tried this kind of thing last November when I bought my G1, putting it on a GoPhone account instead of using t-mobile. The biggest problem I had was the lack of 3G (which is t-mobile only on the G1), since once in a while my phone would decide it needed to download, for example, an update, and there went all my bandwidth and all my minutes, too (and I was never allowed to get 100MB for $20; the most I could ever get was 10M for $15). So, last month, I broke down and went with a month-to-month plan at t-mobile, and since I can get unlimited data while paying the same as I was paying on a GoPhone account, I'm happy, and I don't have to nervously check my minutes every day and put my phone into airplane mode near the end of the month, etc.

If you really don't have the money, this could be worth it, but a similar thing was months of stress for very little savings, for me.