What makes me nervous is the provision that O2 can slap on additional charges if they think you're tethering, sharing files, watching videos etc.

I'm more comfortable with T-mobile's policy. If you cross the line of their acceptable use policy, they never impose an extra charge. Instead, they just throttle your connection speed between 4PM and midnight until the end of the month, then it goes back to normal.

With a T-Mobile Pay As You Go SIM, the cost for data is £1 per day, charged only for the days that you use it. Or you can send an SMS to get 5 consecutive days data for £2.50. There's no ongoing commitment, no contract, no monthly minimum.

For £20 per month on a rolling monthly contract, T-Mobile offers 600 minutes, unlimited texts and internet access. You can cancel anytime with 30 days notice.

If you're a light user, the best deal is Asda Mobile, who resell Vodafone access as a dumb pipe. It costs 4p per text, 8p per minute for voice, and 20p per megabyte for data. No minimum, no bundles, no contract.

Regards,
Roger