In the collision between French telecom law and Apple's carrier exclusivity for the iPhone, guess who blinked. Engadget
and the International Herald-Tribune
among other sources are reporting that the French iPhone will be sold in two versions, an Orange-locked handset for 399 euros, and an unlocked party animal for some as-yet-unannounced higher price. This is a consequence of France's statute, on the books since 1998, forbidding carrier locks beyond a six-month introductory window.
Given the option of a third-party unlock (either free or paid-for) versus shelling out extra for a legit, unlocked, vive le France iPhone... well, I expect there'll be a bit of shuttle diplomacy going on as would-be iPhone buyers decide to visit Paris for the holidays.