In the UK (and I believe much of the rest of Europe), the monthly line rental is basically paying off a loan for the phone. You can get (just about) any phone for £0 up front if you're willing to pay enough every month.
E.g. if the phone costs £500 out of contract ("pay as you go"), it will probably be free on a 18-month contract that costs £40/month. If you chose a £20/month contract then you'd have to pay about £200 up front.
Same thing further up north, in Norway.
But I get the impression that it's not like this in the US?
More people either buy in without a contract, or 2-year contracts?
The major carriers in the US are all set up for 2 year contracts, which come with subsidized phones. You can - technically - go month to month, but it's not a publicized or promoted feature, and doesn't come with substantial discounts.
There are alternatives - T-Mobile just came out with a $50/unlimited month-to-month plan - and there are some smaller carriers with month-to-month options, but they're the exception.
E.g. if the phone costs £500 out of contract ("pay as you go"), it will probably be free on a 18-month contract that costs £40/month. If you chose a £20/month contract then you'd have to pay about £200 up front.