I upgraded via eBay to a Pre 2 recently. As long as you don't change to a dumbphone, nothing will change. Well, except Mobile Hotspot will be an additional charge. You keep your unlimited data and your contract term stays the same as it was before. For example, if you had 3 months left of your 2-yr contract, you would still have 3 months left. If you are month-to-month, you would still be month-to-month.
Originally Posted by AlbanyHDTV
If you upgrade using Verizon, you'll be signed to a new 2-yr contract. Some people have said they've been able to keep unlimited data, but I don't know about that. You will also have whatever the new contract pricing is. For example, if you got your original contract when it was (for example) $30/mo for 500 minutes, but now they offer than plan for $45/mo, you'd have to pay $45/mo.
If you are a recent Verizon customer and plan to stay on it for at least 2 yrs, it may make more financial sense to upgrade. If you have a legacy plan, you may be better off getting one off eBay.
For me, I would end up paying probably $25/mo more through the upgrade route, so it was a no-brainer to shell out for an eBay phone. But I've been with Verizon for ages and haven't renewed my contract for like 10 years. Your situation is probably much different.