BTW, O2 has commented (or rather declined to comment) on the price slip by now: http://www.pocket-lint.co.uk/news/news.phtml/15690/16714/O2-no-comment-iphone-payg.phtml
They say on here that the iPhone is offered with any of their PAYG options.. so there is a possibility.. just on the site they had loaded 'by accident' it said you needed to use the iPhone sim.
soon see