Why would an iphone 1 be a pound on ebay?

There's new unlocked iphones with 4gb memory, there iphone 1st generations which work fine

Because it is full of sand. Not software.

People trying to scam, it'l either be broken or just plain fake. Don't always trust the descriptions.

It could be old, broken, or damaged in some way. I would pass, for reasons of unnessisary hassel.

People start auction low for no insertion fees. Doesn't mean that's the price you will end up paying.
Be careful some are from China and although they work they are programmed to display in Chinese.

Is that a buy it now option or starting bid? That's your ans.