What is the best deal for the iPhone?

I'm looking into buying an iphone soon and I'm not sure what to do.
I would like to buy the iphone 5, but I don't want AT&T/Sprint/Verizon service because they are just too expensive. Some people have told me that the iphone 5 is not much different from the iphone 4s. Is that true? If so, would it be more beneficial to me if I bought an iphone 4s instead?
Also, if I buy a used iphone I'm concerned about not being able to have a warranty or upgrade.
Would I be better off buying a new one or a used one? Would I be better off buying an iphone with one of the 3 services, or buying an unlocked one for more $$$ but paying less on my monthly bill?

The 5 is a pretty big step up from the 4s but depending on your needs the 4s could be good enough. The camera is almost as good, but the design, battery life, screen (size and quality) and processor are a lot better on the 5.

It's always cheaper buying a phone outright and taking up a cheaper plan with a carrier than signing up to a lengthy contract. It's just a matter of whether you can afford the initial purchase or not. Many people are put off by spending a lot of money initially but it is cheaper in the long run.

If you're going to buy pre-owned make sure that there's some warranty left as you can extend this for another year before it runs out.