I had a friend who tried to back out of his verizon contract using this. The verizon rep flatly told him they wouldn't cancel his contract and he'd have to sue.
He was pissed at the time (he wanted an iphone) but he has a droid so it all worked out in the end for him.
I wonder if he could take them to small claims court over the issue. If so, then i suspect he'd win. I doubt that Verizon would even bother showing up, for $150.00.
With that said, they'd have to get the money from him. If they took it from my credit card, for example, Discover, I wouldn't be surprised if they'd just credit me back and ultimately side with me....but I've never had the desire to break my contract.