Is O2's Simplicity the way to go with iPhone 3GS?

2GB 3G S Pay&Go - £548.30 + 18 months O2 Simplicity at £19.58 = £900.74 cost of ownership (with ability to upgrade at any time)

32GB 3G S Contract -£274.23 + 18 months O2 Contract at £34.26 = £890.91.

So assuming Simplicity works with the iPhone it could be the way to go (with a data bolt-on).

Having said that I was in an Apple Store swopping a faulty iPhone. The genius at the Genius bar activated it in-store for me but when I got it home and put an old PAYG O2 SIM in it it became deactivated - put my O2 contract SIM back in and reactivated.

I haven't come across anyone yet that says they are using a Simplicity SIM in an iPhone (that hasn't been jailbroken).