My understanding, which could be totally wrong is:
most of us probably use 2 year contract,
But, after one year, you can upgrade to the latest and greatest without being penalized by getting hit with the ETF. So, why pay the higher price(less discount) of a 1 year contract, if they're going to let you upgrade at the discounted rate anyway??
But, with NE2, depending on your phone(I think), you get additional either $50 or $100 towards that new phone, at the discounted price of the new phone(discount from committing to another 2 year plan)
For the Droid, what we're hearing is $199(after rebate) with 2 year commitment.
$269(after rebate) with a 1 year commitment.
Most other Verizon phones(@199 for 2 year) seem to go for $229 for 1 year contract.