But the iPhone's specifications are published on Apple and O2's websites. From a technical point of view it must work worldwide on all the frequency bands that the iPhone can handle. I suppose as long as it's not explicitly stated that restriction shall only apply within the UK, therefore the customer can assume that as long as there isn't any technical barriers-say not on CDMA network- the iPhone should work just unlocked for them in a foreign place. Anyone see what I mean?
From a purely technological standpoint, you're absolutely correct, the iPhone will operate on any GSM 2G or 3G network as long as it uses one of the four compatible frequency ranges, and as long as the iPhone has a valid Subscriber Identity Module installed, and as long as the physical network you're connecting to is either operated by, or has a reciprocal service agreement in place with, the carrier that issued of the SIM. However, the iPhone has been engineered so that it will only work with SIMs issued by O2 in the UK.
The evidence for this is the fact that you CAN, in fact, roam with the iPhone to areas where O2 definitely does not operate any cell towers. This is a service of convenience offered by O2 whereby the roaming partner bills O2 to act as a temporary agent on O2's behalf to provide you with service while roaming, and O2 in turn passes the charges on to you.
However, from a contractual standpoint, the agreement means exactly what it says: any attempt to unlock the iPhone so that it works on any network other then O2 (in this case, meaning any attempt to cause the iPhone to accept operation with any SIM other than one issued by O2 UK Limited) may cause permanent damage to it.
I see this as more of a case of O2 trying to wash its hands of any potential liability if customers do cause damage to their phones as a consequence of having unlocked them without permission.