Where: O2 store, Walsall.
How long: Just over an hour outside, 20 minutes inside.
Queue: Approximately 20 people, I was 8th in line.
Customer service: Really good. Friendly staff, very apologetic and, to be honest, really wasn't their fault. The guy did a pretty good job of demoing the iPhone to me, and I played along for his sake even though I've already used one for about 6 months 😉
Bought: 8GB (only had about 4 16GB and I wasn't that bothered).
To be honest I do have a bit of sympathy for O2 given the comments so far. Don't forget that their own systems are completely reliant on external services for the credit checks and that has to be a pretty time consuming part of the process. That being said, a similar thing happened for the 2G launch (if anyone remembers, the ID check for chip & pin didn't work for about 4 hours) so they should really have put some additional infrastructure in place.