Ok so an update on my iPhone problem...
well I e-mailed o2, who sent me a message back:
Good Evening Terry
Thanks for getting in touch about your iPhone.
I do understand that the Wi-Fi on your iPhone is not working.
As I've carefully checked your account I'd like to inform you that the
current insurance that you've on your account doesn't cover your iPhone
In order to claim the insurance you need to change your insurance to one
of our O2 insurance premier for £10 per month. Please reply to this
email about the same.
I hope the information that I've provided will be useful to you.
Kind regards
Anthony
O2 Customer Service
so after reading this I phoned o2, they admitted it wasn't my fault that the insurance wasn't the right one, then basicly said after admitting this, that my problem is software related and will not be covered by the insurance.
although he said himself that it wasn't software related

and said I should contact apple (who state on their site that if it is not under warrenty any more, won't do anything about it etc)
o2 did however offer me an early upgrade, which I decided to do anyway since my plan was (before this) to unlock my phone, sell it on ebay and then buy a 3G S, then when my contract ran out in September, get a simplicity sim.
but now, what do I do? can I force o2 to repair my iphone? or do apple do it? or what? because it's a lot of money for insurance, phone, etc for it to stop working properly after only just over a year!!