I bought my sister a prepaid phone through T-Mobile. It's a good plan *IF* you don't talk a lot every day or want any "mobile to mobile" freebies. There are phones at various price points (sold at Radio Shack, Target, T-Mo stores, Costco... I bought hers at Costco for $50 which included $15 of airtime, I think.
Here's the trick to make it a decent deal... once you've bought $100 of airtime, the prepaid airtime lasts 12 months from when you last added minutes. So, I bought her $100 of airtime right off the bat, and she had a phone that would work for a year or until she used a little over 1000 minutes. The more airtime you buy at once, the cheaper it is but 10 cents/min is the best rate. For her it's just to use when traveling, in emergencies, when she's not near a landline, etc. She only has to buy an airtime card every 12 months, etc. In 3 years, I think it's averaged out to something like $8/month including the purchase of the device, but she doesn't talk on the mobile phone that much.
If you think you'll be talking on the phone a LOT, Wal-Mart's "StraightTalk" has a $45/month unlimited-everything plan.
One caveat of most of the prepaid services is that roaming isn't available... For example, if you have a contract T-Mobile phone it'll work on AT&T's network if you can't pick up any T-Mo signal, but the prepaid will only work when it detects its "home" towers. That offers some benefits on the StraightTalk service, because they use Verizon's network so there's pretty extensive coverage.
Another thing that I noticed is that many prepaid plans have gotchas like a $1/day charge for every day during which you use the phone at all... so if you have one of those plans and make a 1-minute call today, it'll cost you $1.10. Usually those plans come with something like unlimited mobile-to-mobile on that company's network, so for your $1 you can then talk all day to your friends on the same network... sounds like something designed for teenagers who live on the phone, but I think modern teenagers just text each other.