Speaking of the iPhone, O2 have released the PAYG iPhone prices.
http://www.reghardware.co.uk/2008/09/01/o2_payg_iphone/
£350 = 8gb
£400 = 16gb
BUT includes 1 year unlimited data and hotspot access to The Cloud/BT Openzone. Unlimited data/wifi is £10/month after the first year. £10 topup gets you 500 mins. Normal PAYG tariffs apply for calls.
Not a bad deal then. Getting seriously tempted myself.