I was thinking the same Chris. The unlimted data stuff in particular. Without browsing, one of the machines great features is gone? Surely to benefit from all the phone features, you're going to have to use O2?
From what I'm reading, the iPhone is a pretty big compromise as a phone anyway. Add in non-expandable storage, and 8GB isn't much of an iPod (especially for video). It appears to be riddled with compromises in almost every way. I'm sure it's a lovely thing to own, but I won't be one of the 'lucky' few. £260 and c.£50pcm = f**k right off