This is one of the latest 3G handsets with a stunning 3.2MP camera - I've just received mine and it is superb.
To get the term cost, follow the link and select O2 125 12 month. 7 months free line rental available via cashback. Go via Quidco to get another £36.50 back!
Various other deals on O2 and Vodafone.
It's a clearance deal so they are either ex-demonstration, trial or mail order returned, but it's a great price anyway.
[Edit] - Select O2 tab to get to the 125 12 month deal.