I've been looking both of these phones, but can't decide which one would best to go for.

I've looked at o2 Pay and Go for the Nokia N8 £330
HTC Desire HD is about £450-£500 Sim Free
HTC Desire HD - Free on a £40 p/m 24 month contract

I would only need about 100 minutes as I text a lot more.

I've also been looking at Nokia E5 - As I like the qwerty keyboard.

The Blackberry Torch and when it is released the Blackberry 9780.

o2 vs T-Mobile Contract or Pay and Go?

Any comment or advice would be good.

Thanks in advance.

Given you are a texter, I recommend you go for a phone with a hardware qwerty keyboard.

Whichever phone you get on T-Mobile, regardless of how much you pay contract, you can have the Unlimited Texts Flexible Booster added onto it free of charge so you will always have unlimited texts.

For example for the HTC Desire HD to get it free:
O2 - £40p/m - 900 minutes/unlimited texts/750MB internet
T-Mobile - £40p/m - 1200 minutes/unlimited texts/unlimited internet(fair usage policy)

Pay As You Go:
O2 - £10 top up = Up to 300 UK texts, 500MB UK data
T-Mobile - £10 top up = Unlimited texts, choice of weekend rewards and possibly 6 months free internet if bought direct from them.

IMO The T-Mobile contract is better as you will be getting more minutes for no extra cost, and you can change your Flexible Booster every 30 days if you want.

For PAYG, you will get unlimited texts with T-Mobile for alot less.

For internet (a must have for Desire HD really) IMO T-Mobile is still a better value option. You pay £10 a month to get 500mb internet on O2 for one month, with T-Mobile pay £20 once to give you unlimited internet(FUP) which will last you six months.

Also, with the Tmobile Desire HD, there is the option to pay £90 down, and get it for £30 per month. That would give 600 minutes, 500 Texts , unlimited web AND unlimited texts. By paying out the £90 now you'd save £150 over the 2 years.

I just got the Orange San Fransisco (ZTE Blade) android PAYG for £109, unlocked for £2 and now using on the Tesco Sim only deal for £10 a month that gives 500 mins, 3000 text, 500mb data on a 1 month rolling contract.

Tesco are using O2's infrastructure.

Works out really well for me.

I have an HTC wildfire using giffgaff sim

Not really needed. I have the HTC Desire HD and typing on it is an absolute breeze. The text prediction is also very good.