I received my new 3GS iPhone in the post today.
I went for the Tesco deal which is the cheapest available at the moment at £20 per month for 12 months and an upfront cost of £320 for the handset. Includes 250 minutes per month, unlimited internet and texts, not bad!
There is a cheaper option, going for just the 3G (not the S) and this is only £220 upfront at the same month rate. including the same deal.
At the moment no one else comes close for first time contract buyers.
Link to the site where info can be found is here