Hello,
This may sound loopy, but have you tried going to a 7-11 or a Target in your area? Here in Southern California the 7-11 stores sell the AT&T and Virgin phones, and I've seen various pre-paid phones at Target off and on. The phones are in the phone carrier's packaging with all the info and it's legit as far as I can tell. Might be worth a shot if you want to ensure you have the coverage in your area (I don't think they'd sell phones in areas that would not provide coverage). Mind you, I'm talking about major chains, I don't think the generic market on the corner would carry AT&T phones, but you could always call the customer service number on the box before you buy the phone.
FYI, even if you save money monthly with pre-paid, consider the cost for the initial phone purchase. If you spend $125 for the phone and say $20 a month to add minutes, that is $125+$240=$365 for one year. If you find a good cheap plan like $19 a month for 30 or 60 minutes, free phone, free activation, but a 1 year plan, that's about $240 plus taxes.
I know how hard it is to find decent pre-paid, I ended up signing up for a 1-year plan so I wouldn't have to worry about losing minutes, long distance, etc. My plan was $19 a month with AT&T and 60 minutes a month (may not be available in your area). I have since moved up to a different plan with T-Mobile, more minutes for $29, but for me the costs are cheaper than with pre-paid since the phone, activation, shipping, voice mail, etc. are free.
Good luck!
Reg