You can develop for the iPhone using the simulator just by owning a Mac, and downloading xcode. However if you want to put stuff on the iPhone to test it out, then you need to be a registered developer. It costs $99 to join, but if you are at all serious about developing for the iPhone, you should join as early as possible, since it seems to take Apple a long time to respond to your application.
5/15/2009 I bought into the developer program.
5/19/2009 I sent an inquiry about why they haven't sent me the activation code.
5/28/2009 I sent another email
6/23/2009 They responded to the first email, over a month later, and resent the email that had never been sent
7/7/2009 They responded to the second email that I had successfully enrolled in the program.
The moral of the story is that if you are going to join, join soon, and if you don't get an activation code rapidly, send a support email because it will take over a month for them to respond to the email.