I use Straight Talk, which is part of Tracfone, who is owned by America Movil (their owner Carlos Slim is the richest person in the world). I bought their AT&T SIM, popped it into my iPhone 4S, set up the data APN and I was using AT&T's network without dealing with AT&T's customer service, bills or contracts.
I pay $45 a month, which gets me unlimited talk, text and data (some people say their data is capped at 2GB, but I haven't had a problem). It's cheaper if you buy it 3, 6 or 12 months at time.
If you own your phone outright, prepaid is the way to go.