I've been with o2 for the past 5-6 years, and stuff has only gotten better. Signal has been great in most places, dying out a bit in a more rural bit of Norfolk, dying out more in some remote areas of Wales and Scotland... Overall though, has been better (on the whole) than other providers. It was better in Scotland (near Loch Lomond) than T-mobile (3-4 bars compared to none). It is fantastic for me in the South (Southampton), and locally, around Southampton University, it is full signal, whilst the likes of Orange dies out - which, I have to say, is quite shocking to me.
EDIT: o2 online customer service (my main port of call with the o2 online SIM) has generally been good, although as can be seen in this forum there is conflicting info regarding PAYG and the new iPhone 3G from emails, so I guess they aren't as good as I thought - though I've not really had to use them much!
And slightly OT: I'm currently on an o2 PAYG online SIM -- one that has similar rates to those advertised for the new iPhone; for £10/month I get 300 free texts, 1Mb free internet (which on my crappy phone with my current rare usage suffices) and of course the £10 in credit, cost is something like 20p/min for the first 3 mins, then 5p/min thereafter to landline numbers and o2 numbers, 20p/min all the time to non-o2 mobiles, and 3 or 4 times a year I get 10% of my topups back in the form of more credit...
By the sounds of things, the tariffs for PAYG iPhone 3G are the same as this, so I could use this and pay an extra £10/month for the unlimited wifi, giving a fairly good deal in my opinion!