I bought my new Turbo at retail today and had no problem turning in an old (but still very serviceable) 1st gen Droid Incredible for a $100 credit. AND, I guess because I did it in store rather than on line, it was not a gift card to be used on a future purchase, but rather a $100 discount off of the $599 retail price. New Turbo for $499 (plus tax). BTW, the rep looked the Incredible up on their rebate chart. If they weren't having this promotion the trade in value would have been $6. NICE!
EDIT: Technically it wasn't a $100 "discount". The rep entered the trade info into their system, generated a gift card, and then used the card toward the purchase.
Sounds like you had a rep who didn't mind bending the rules a little bit.
Either that or they have a different in-store policy than online...but that wouldn't make much sense since they try to encourage those who want to buy at full retail to buy online rather than in-store.