Need advice on selling a smartphone

Here's the deal: I bought a Verizon iPhone 4S with a two year contract on launch day. While I like it a lot, I'm a tech whore so I want the new iPhone when it comes out. I'm assuming I won't be able to buy it for the two year contract price ($200) since I'd be about a year into my original contract. I'd like to sell my current phone, then use the money to purchase the new iPhone for full retail for something like $650.

Has anyone ever sold their smartphone? Specifically, a Verizon iPhone. What do you do with the SIM? How do you go about wiping the device? How do you make sure your iMessages don't go to the new owner? etc.

Or does anyone have advice in general about this sort of issue?

Thanks for any help.