I have a blackberry, with Orange, and can pin friends, if my daughter gets a Blackberry on PAYG can she pin me for free?

Yes.

I have a BlackBerry on contract with Virgin and my daughter has one on PAYG from 02.

It doesn't matter who you're with or whether you're on contract or PAYG, anyone with a BlackBerry can BBM each other.

Thank you. I was wondering how that worked though as wont she need to be online? wont she gat her own "live" email account?

Yes, but if you're on PAYG, don't you need the Blackberry Bolt on (02 is £5 per month)..... despite the fact that I am the exception (I believe) to this rule as I seem to get free internet via GPRS and BBM without paying anything extra - most odd!) on my PAYG....

But - I was told that usually you need the Bolt on for such things like BBM to work..unless anyone knows different?

That's correct, you do need to pay for BIS (Blackberry Internet Service) if you want to use BBM.

No, that's email.
She has a blackberry, which has a PIN number.
Blackberry Messenger uses this PIN number to send messages from one blackberry to another.
No other email, or "live" account is needed.

She just needs a blackberry data plan, and to register the phone accordingly.

You need to have both BB messenger AND internet enabled on PAYG to make it work.
T-Mobile (I work for them) do it for £5.00 for a month or £20.00 for six months, (Includes internet AND BB) It's one of the few instances where PAYG customers get a better deal than contract. Not sure what other networks charge, though.

Having a quick look around the websites Payg bolt on is free on vodafone

On O2 its free if you top up £15 a month and are on the Blackberry Text and Web tariff.