Good analysis there Matblack. For me, as an original 2G owner, the 3Gs is undoubtedly a worthwhile upgrade - for me the biggest appeal is the jump from EDGE (which itself is probably only available 20% of the time I want it) to the latest standard (HSPDA or whatever it's called!)
My only consideration is to contract or PAYG. As much as it hurts to work out the cost over an 18 month period, buying a 16GB 3Gs on PAYG for £440, plus a £20p/m simplicity tarriff works out at £800 for the period, the same as a £35p/m contract plus the £185 up front over the same period.
The appeal of not being locked into a contract is there, obviously, but I can't help but look at the contract as a chance to spread the cost for no extra £. Hmm, decisions.