OK, here's the deal. I am a 100% Puertorrican, living in Puerto Rico and have an active iPhone
How I did it: Unfortunately, you will not be able to use a local 787 phone. Just let it GO! To activate your phone, get a friend or family to lend you their address in US. You will need to FAIL the credit check, so iTunes asks you if you prefer to have a prepaid plan instead.
The activation will proceed with your new choice and as soon as you finish it will take you to the Fund your Phone plan at ATT, which IMMEDIATELY will ask you for your address... There you type your REAL address in PUERTO RICO and your REAL payment info. I used my PR credit card without a problem.
The good: Your iphone is activated. Second, you dont have a 2-year contract. I confirm that all features work including unlimited EDGE, Visual Voicemail, Conference features, as well as all internet... 100% functional. Also, the ATT network considers PR local, so your calls to/from US/PR will count as local minutes.
The bad: 1. Prepaid plan is more expensive. 2. Your phone number will be on the area code of the US address you supply, so people calling you will be making a long distance call to a butt-ugly phone number. The only solution is to activate Call Forwarding on a local 787 phone you might have. The bad part is that you might loose caller-id functionalily because all calls will register as coming from the forwarding phone. Also, note that forwarding a cell phone number from another carrier will cost you double minutes (according to Claro, a local provider, forwarding costs the same as receiving a call PLUS making a call... So a 5 min forwarded call costs you 5 minutes incoming on your local phone + 5 minutes LONG DISTANCE CALL on your LOCAL phone PLUS 5 minutes incoming call in your iPhone.) 3. SMS is a separate fee.
This is a temporary workaround for all of you that like me got one of these babies. The best part once again is that we have no contract, so when the moment comes that finally the iPhone comes to Puerto Rico, you can switch off the old number and legally activate here, in the land of the pretty girls and great sun.
Macbook Core2 Mac OS X (10.4.10) iPhone 1.0