NextWorth is announcing a new trade-in service, this time for first-generation iPhone owners looking to upgrade to the new 3G model. All users need to do is complete a form, send in their used handset and wait for the fat check to arrive. NextWorth customers can receive up to $200 for an 8 gigger, or as much as $300 for a 16GB first-gen iPhone.

NextWorth deals with consumer electronic upgrades and trade-ins. The company specializes in analyzing if a product is indeed in good shape and determines the price for it, based on current market values. To receive the full value quoted, your iPhone must be in "light wear" condition, and must also have "no visible scratches on the screen with all of the original accessories included". Given that Apple's iPhone 3G is currently priced at $199 (and $299 for the 16 GB model), trade-in amounts will fully cover, or nearly cover, the cost of the upgrade.

"As the demand for the first generation iPhone in secondary markets remains strong, we are able to offer higher dollar exchanges and remove the price issue from the decision to upgrade to a 3G iPhone," said Dave Chen, CEO of NextWorth. "We're taking advantage of this unique spike in market values and passing the dollars back to consumers, making the upgrade process as fast and easy as possible."

If you want to know what will happen to your iPhone after it has been traded in, NextWorth claims that still-usable trade-ins will be refurbished and resold by the company, while "hard-worn" or "broken" handsets will either be sold for their parts or disposed of through a certified recycling partner. So, either way, it's all for the benefit of everyone, but mostly yours.

So here's how it goes. You complete a form in which you specify the condition of your device. Remember that current market values and the condition of the device determine the trade-in value. If you accept the sum of cash proposed by NextWorth, you receive the trade-in box in which you must carefully place the device and all its accessories. You must then send it to NextWorth, who also pays for the transportation fees, for evaluation. If NextWorth finds that your device is indeed in the condition specified by yourself, you receive the check in 7 to 14 days. That's it!

Alternatively, if you prefer to lock in the price in exchange for a gift card, you can bring in your iPhone to a participating retail store for instant credit. You can also get "immediate in-store credit" if you participate at Circuit City and J&R Computer World stores.

Your first step to upgrading to an iPhone 3G for free is here.