Thanks for clarifying Dave - much appreciated.
As the phone is no longer usable due to the LED issue, I've just updated and restored it to run native 4.2.1, and am using my old 3Gs for the time being. I have asked T-Mbile to unlock it again, but they say the only way is to buy a PAYG SIM, add £15.00 credit, then ask them to unlock it, but it will take them 28 days and they will send me a 'subsidy PIN'. I was under the impression, as you have stated, that all they did was contact Apple, who updated their database with the phones IMEI.
The only issue is, as the phone was bought on contract less than six months ago, they may decide not to unlock it as my PAYG will only start from when I activate the SIM. So basically they have screwed me.....unless they just unlock it.
If they do unlock it, at least then I will be able to get a replacement at the Apple store, if not, the only option I will have is to sell it, and try and buy a factory unlocked one