Excuse my ignorance but would any of this be possible...
Buy an iPhone from the apple store (don't connect it to O2)
Jail break it, use my t-mobile sim card in the iphone 3g.
Add this to my t-mobile contract - Mobile Broadband Plus - Handset as modem (See bellow for further description)
Or am I going to get more +1s for simply getting a 3 pay as you go usb modem

.
Mobile Broadband Plus - Handset as modem
Already a T-Mobile pay monthly customer? You can add Mobile Broadband Plus to your account and use your phone as an enabled device like a USB modem. If your pay monthly plan already includes web'nwalk, Mobile Broadband Plus will be £5.00 extra a month and if you don't, it will be £12.50 extra a month. Mobile Broadband Plus will stay on your account until you ask us to remove it. You'll need a compatible laptop, compatible phone and mobile broadband coverage. Remember that you can't use your plan to make internet phone calls. If you use your plan outside of the UK, we'll add roaming charges to your pay monthly account, please see t-mobile.co.uk//broadband for more details. This plan comes with a fair use policy of 3GB a month. We'll monitor how much you send and receive each calendar month so that we can protect our network for all our Mobile Broadband customers. If you use more than your fair use policy amount, we won't charge you any more, but we may restrict how you can use your plan, depending on how often you go over your amount and by how much.