Yeah, you should figure out which phones you are interested in and figure out if it's cheaper to buy a phone outright than do a contract. I think there are sites that can calculate it for you.
We have Orange, and we have had a mostly good experience. I've heard of people who have had problems with them, but I've heard of problems with almost every company. Orange has an added bonus because you get "Orange Wednesdays" (2 for 1 cinema tickets). You can get them either with plans or sim only.
If you're just looking for a basic phone which is cheap, you might want to go with Virgin. Although, it seemed my husband was *constantly* topping his up when he had payg on it.
As for phones, before you take a plunge for something like an iPhone, consider all your options. There are alternatives which can work out to be cheaper and/or have better options. I ended up being so glad I went with an android based phone instead of an iPhone. We saved money, and it had features (expandable storage, customization, mostly free apps) that I wouldn't have gotten with an iPhone.
If you just want internet phone and aren't too fussed about touch screens, you might want to consider a Blackberry or a Nokia E71. Problem is a lot of companies consider them premium phones because they are smart phones, and even older models can sometimes (but not always) being costly.
The major phone companies I can think of off the top of my head are Orange, O2, Vodafone, Virgin, 3, TMobile... Most of them have ways on their sites to narrow down phone choices by features, and usually you can do it both for contract phones and payg.