You can't buy an iPhone 4 on a contract with 02 for now. Why don't you upgrade?
Cost. I'm 5 months into a 24 contract. When my original 3g contract was up for renewal in January I stupidly got rid and went with a cheap contract and cheap phone. I've been using my girlfriends 3G for the past few months but it's died. Cheapest option for me as far as I can see is 2 contracts.