Refurbished iPhone 3GS Now $9 at AT&T
While the models are refurbished, refurbished doesn't mean they were banged-up. Sometimes it means they were returned after a day when the consumer decided the device "wasn't for them." Sometimes it means there was an issue with the device and it was returned and repaired. You won't know for sure until you get the device in your hands, but the devices will have had to have been returned during the 30-day trial period, and according to AT&T, "have been unused or lightly used," and some will have minor scratches.
In terms of warranty, refurbished iPhones carry a limited warranty which is based on the original purchase date of the iPhone. The remaining coverage will be at least 90 days and will vary from device to device. It is still possible to buy an AppleCare Protection Plan for the device, despite it being a refurbished device.
It's possible there's some connection to the upcoming September / October launch of the iPhone 5 (or 4S). It's been rumored that AT&T and Apple would make the iPhone 3GS free on contract after the introduction of the next-generation iPhone, while the iPhone 4 moves the "year-old-device" price of $99 (for a downsized 8GB model), but that's all a rumor.
If you want one, you'd better hurry. Generally, these sorts of offers sell out quickly.