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I have done a lot of research on this and ended up buying an I Phone yesterday. I plan to get a Giff Gaff sim per recommendation here:
http://www.moneysavingexpert.com/deals/cheap-iphone
and then pay £10 per month which gives plenty of calls and unlimited texts and data.
For an Iphone 3GS 8GB, the 2 best ones that I have found on contract are the T Mobile as previously mentioned (but limited free minutes and texts although that has a package to give ulimited landline calls - that deal may disappear at the end of this month) and the second one is Tesco mobile - £150 up front for the handset and £15 per month or £20 and no up front charge.
Don't just rely on the internet, ring them all up once you have an idea of the package and price. People can deal, websites can't.
Have a look at android smartphones with other suppliers first, pick one that you would be happy with then go back to Orange and tell them you are thinking of moving but would like to stay with them to avoid the hassle.
I did that and T-mobile saved me a fiver a month on the same phone with a better deal.
I have a Sony Experia X8 (rubbish phone) with 300mins, 300 texts and unlimited internet (in reality about 2GB) per month for £12 a month.
The idea of me leaving was what did it. Orange will want to keep your custom so will be prepared to do a deal. If they don't just notify them you are leaving and request your PAC code to keep your number. You will probably have to send a recorded delivery letter to Orange to get your Pac code but you can keep you rnumber.
You won't have lost anything by trying.
Good luck.
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