I think O2 have an exclusive contract for at least 18 months, and Apple get a monthly kickback on the line rental.

Hackers have already unlocked the iPhone, however Apple every software release are making unlocked ones stop working (at least as a phone) and voiding the waranty so you cant get it replaced.

Also because it isnt 3G it uses a technology called EDGE for its fast (well faster than GPRS but slower than 3G) data access, and I think O2 is the only company who has EDGE support on their network.

Jen