Actually I thought this was a very un-evil thing for them to do, considering my experience with cell phone companies in the past. They could have said that you can't upgrade, or that upgrading would tack on two additional years. Instead they said your 2-year commitment will restart, which is pretty awesome I think.
Not on top of the remainder of the 2 year contract from the last iPhone. (i.e. rather than extending your contract to 3 years, they just delete the old contract and create a new one that is 2 years)
Cellphone companies are the ultimate evil.