Problems activating iPhone 3G (O2 UK)

[Cousin Dirk]

So, I finally upgraded to the white iPhone 3G today from an O2 store. But I'm having trouble activating it.

When I plug it into my computer, iTunes gives me the following error:

The iPhone gives me the error:

Repair Needed
iPhone cannot make or receive calls.

Any idea what's doing this? Is this an Apple problem, or an O2 problem? The only thing I can think of is the upgrade not being applied to my account properly.

Help?

 

[Cousin Dirk]

I've gotten it sorted. I took it to a genius at an Apple Store who replaced it.