No, O2 won't have PayG phone available at launch. You'll have to get the phone direct from Apple. (Which you're incredibly unlikely to do on launch day unless you get very very very very lucky at an Apple Store)
Thanks guys. 18 month £40 per month deal 32gb it is, with a 24 month 16gb £35 per month deal for the missus. We'll both get £125 cashback and about £200 back (total) on my 16gb 3G and her 8gb 3G through eBay.