iPhone question re. activating?

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Hopefully this is a simple question.

I currently have a year left to run on a contract with O2 (not for an iPhone). I have a contract with a bolt-on, which I can change whenever I want. I had a second hand blackberry for a few months so I had the Blackberry Unlimited bolt-on, then I sold it and I have an extra 200 minutes instead.

Having the bolt-on changed to the iPhone one is pretty simple (they can do it within 24hrs of a short phone call), so I'm thinking about doing that and buying a PAYG iPhone, and putting my O2 contract SIM into it.

Would that work? I've never owned an iPhone before, so I don't know the exact procedure you go through when you buy one and first plug it into iTunes. Assuming I buy a PAYG one, I presume I'm not stuck with having to activate it and use it as PAYG?

Ta. :)

BTW I'm using an Macbook, if that makes any difference.
 
Are you sure you can't wait? It's probably only two months until this is launched:
500xiphone10.jpg
 
Nah, I just want the cheapest one atm, going to get a 3G as they are substantially cheaper than 3GS.

Really I just want a decent smartphone, I'd be open to Android ones but I do everything on a Macbook so I need something that's going to sync seamlessly.
 
Well the iphone 3G is getting on a bit so if your that desperate to get one id go for the 3GS as its a faster phone plus with the new OS coming for the iphone...the 3GS should run it pretty easily whereas the 3G will probably struggle.
 
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