Best Provider and Contract for iPhone

I have decided to abandon my old phone and finally buy an iphone. I'm a bit green about plans so could do with some advice.

I want a reasonably cheap plan. I'm currently with O2 and make most of my calls to O2 so possibly a plan with them for free 02-02 calls might be good. I dont foresee myself using it for the internet alot. I'm either in work or home so can use my laptop or ipod for internet. I also dont make many calls to landlines and defintely not overseas.

What provider/plan would you recommend?
What iphone?
thanks.

First off I would wait a couple of weeks until the iPhone 5 is released and then see what plans networks are offering.

Although you say you don't plan on using it for the internet and if you turn off 3G/Edge you would be fine but be aware smart phones and especially the iPhone can be quite heavy on data usage "behind the scenes"....You can restrict most apps data usage from within their settings but I currently use the iPhone 4 and there have been days where the data downloaded has been upwards of 400mb and that would be in addition to what I may have used on my own WiFI.

Again though hang on until the iPhone 5 is released and see what the offers are then.

Further to my previous post there are apps available for iPhones and Androids that would allow you to send free texts and make free calls to other users of the same app... so if most the people you would be contacting have a smart phone you can get an app for all of that....