Since Orange "gave" me £225 for my phone ($450), if subsidised the 4GB iPhone could easily be £50-£100 on a £25/month contract which would be an excellent price. Otherwise you might get a much better tariff.
God, I miss the UK and Europe. I need to move to London or Spain. With all the political crap in the US coupled with big business crapping on just about everyone (if I have never see one more Walmart or chain restaurant again it'll be too soon), I'm thinking I might be getting off this sinking ship... and fast. Sadly, my last trip to London I saw nothing but American businesses where once stood a Mom and Pop local business or something non-American - Blockbusters, Pizza Huts, Burger Kings, it was too much and very disheartening...