I say try the pre-paid service first to see if you'll like the service before signing a contract. While I don't know how T-Mobile is in California, but it's spotty where I live in Gary, Indiana. Chicago has been known to have static and sometimes overloaded circuits with T-Mobile. Cincular is horrible here too, and if they're able to acquire all of AT&T, I don't expect coverage to increase that much. I personally won't go with T-Mobile simply because of the lack of coverage,and they're the worst of the 3 national GSM carriers at increasing coverage. And most people I know around my area can't use their T-Mobile phones in their homes, unless home is that close to a cell phone tower.
I'm currently a verizon subscriber and really have loved the service. A few years ago I had cingular and was having tons of problems as they got popular. I currently am considering tmobile for their 1 year contracts and better phone selection. I have heard a mix of experiences.. from no problems to can't get reception in their house... Please share your experiences so I can see whether I would survive with Tmobile. It's no use having a phone if you can't even use it.