I'm with orange and have noticed a strange problem, I mainly get a 2G signal but can still surf away but at as slower pace I have noticed that if people try to telephone me while surfing it goes straight to voicemail? Is this right?

Nope that is not right. If someone phones you then it should interrupt your surfing. If you go into your settings, then look for phone settings, then look for call forwarding. go to that and make sure that it is switched off.

That is what making the calls go straight to voicemail.

I'm pretty sure the iPhone is a GPRS class B device which means you won't receive calls while browsing the Internet on 2G. It is meant to suspend the service and allow voice through but I find this often doesn't work on phones.

Unfortunately that is right. As Gormond says. If you're using 2G to browse then you can't make/receive calls at the same time. One of the limitations of 2G and certain handsets. 3G browing/calls will work though.

GPRS Class A handsets will drop data in favour of the incoming call. Not sure which one the iPhone is. Sounds like Class B from what you described.

However, i have heard that Orange block it for both devices. Someone might be able to confirm that for me. I know vodafone have no blocks in place and allow GPRS Class A handsets to answer calls while dropping data.

Try doing a hard re-set on your iphone, hold down the home and shut down button until you see the apple logo appear

My 4S will drop the data connection to allow the incoming call in the scenario described above.

You can test this by disabling WiFi and 3G and then calling the phone while it's loading a web page.

I'm in O2 for what it's worth.

My iPhone 4S and my work iPhone 3G both on Orange will send the call to voicemail.

Yep, like i said. The Network are the ones doing this. It happens quite regularly on certain networks around the world.