The loophole is still there. But some folks *do* get caught because they first try ATT branded phones from ebay, etc.. They are still generally looking for ATT branded smartphones, as well as iPhones and a few others. Those are what usually triggers the dreaded mandatory data plan SMS, etc.
Use really doesn't matter since the OP states he's sticking to wifi only. Since he asks for Android I assume he wants some basic apps & functionality of a smartphone.
Nokia would be a better option for a year if you wanted a higher chance of avoiding the data plan. Not Android, understood, but you can often find one via Amazon for $100-200.
The unlocked quad band C3-00 w/wifi is probably the best price you can get on one right now, unless you are looking at used handsets on fleabay.
If you want to try an Android powered handset, something like the Optimus might suffice, but I can't say for certain whether or not ATT will flag it. If you obtained the non-US version, it probably wouldn't be caught.