I really want to buy an O2 branded SIM free iPhone. I want to be able to put my PAYG O2 sim in it.

Would eBay be a good place to get one, seller rating taken into consideration of course.

If you want to put an O2 sim into it, why not just buy it from O2??

iPhones are never 'branded' so it wont have anything at all to do with O2 on it, just locked to a network.

If they're a reputable seller I can't see why not. Ask them to provide a checkmend report though.

I honestly thought they were only sold as pay monthly.

Is the 3GS 8GB the older one?

Nope, It came out the same day as the 4, to replace the 8gb 3g model.

I wouldn't trust eBay with a mobile again, I got one...2 days later it was blocked as it was reported lost or stolen and I was left with a brick... which I could do nothing with

Yep, the 3GS is the older one.

You can buy them Pay as you go from the networks, but whatever network you buy it from..it will be locked to them. So if you buy it from O2 it will be fine

Same happened to me.

3GS 8GB was released at the same time as the iPhone 4. So it's technically not the older one

To answer the OP's question, I've bought cheap SIM free phones from eBay before with no problems, but I'm not sure if I'd be willing to part with £600 for one. Best bet is to go into Phones4U or Carphone Warehouse and badger the sales staff until they sell you one. They'll try and protest about it but actually they get pretty much the same commission either way.

Oh mate, tell me you paid with paypal and claimed it back!

Payed with Paypal but still couldn't get my money back.