I was able to get my Android Dev phone set up very easily without a data plan, just using a wireless connection and Linux, by following the directions on this very useful post from technomancy.org. Luckily I had an Ubuntu VM ready to go, so the entire setup process took no more than ten minutes.
Unfortunately, though, my wireless router is a bit old and sucky, and the wireless craps out from time to time. On top of that, the phone won't keep retrying the connection; I believe it tries to reconnect to your remembered wifi access points once each, then after that you have to manually go back and press the button to reconnect. (I'm running Android software 1.1. I don't think it's fixed yet in cupcake 1.5.) It's quite annoying. Maybe I'll have to put down the money for a data plan....
I think the folks in the issue tracker for #2718 are having the same issue on Cupcake though. Oh well, at least I'm not addicted to using the web from my phone yet. Mostly because "Crackdroid" sounds stupid.
On an unrelated note, I wonder how many android blogs on Blogger use this "Son of Moto" template? sigh... I'll try to come up with something better.