Actually that true, I forgot about that.
OP, wait until Vodafone and Orange are selling it, you'll get a far better contract when O2 have some competition.
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I personally think iPhones are a bit overrated, however I love the internet (simple) access :)
Simple answer, yes. Get one, you won't be disappointed ~ but as stated above, wait until Christmas time-ish, it'll be on 2 other networks by then, and prices WILL come down, so just hold tight.
iPhone has some pretty good competition with Android, WebOS, Maemo 5 and WinMo 6.5. Actually I wouldn't mind having a a phone with all of those operating systems :(.
Yeah the contracts suck, if I were to get an iPhone I'd get a second hand one and a sim only contract because they're usually awesome. Some people don't get on with the keyboard either.
I have no experiences with an iPhone, but I have the touch. They're amazing pieces of technology but I have heard that the iPhone freezes alot, and lots of people complain about the contract they recieve.