should i buy a 3gs or iphone 4?

Im selling my xbox for like $160-220 to this kid, and then when i get the money im trying to buy an iphone with it. When i get it im going to unlock or jailbreak it and put my t-mobile sim card in it and get a free internet app and texting so i dont have to pay the phone bills, just the phone itself. What i want to know is if i buy iphone would i be happier paying $99 for a 8 gig 3gs and keep the extra $100 or would it be more "bang for the buck" to shell out $199 for a 16 gig iphone 4?? also if you know, does unlocking 'f' up the iphone and inform me about anything else i need to know before i buy. thanks.
 
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