Android phones, apps and tablets

It's not usually cheaper buying the phone outright, but it is better. The major benefit to me is in the freedom to ditch network or handset as I please. With the pace of new device releases being able to throw the unit on ebay and pick up a new one is what I want. Do it soon enough and you can get a fair bit of money back on the device.
Unlocked devices are often available quicker, don't get bloatware, get updates quicker, etc. Also, you can expense the phone if it's for work. If you have the money, why get the contract phone?

Ah yeah I see the benefits, but for me it's easier to pay it off monthly as I have other demands on my disposable income, and I'm not in a position to put it on expenses. I look at it that over the course of my contract, I pay a total of £450 if i stay within allowances, so say a good price on a handset is around £350, I'm only paying £100 in line rental over the 18 months.

Malaysian, your data total of 500mb is quite amusing. Mine, on my main line is 10GB (T-Mobile...older tariff). In fact you situation is enough to make people abandon monthly contracts! 500MB? I download movies and stuff on mine, plus create a wi-fi hotspot at home from my Desire.

I'm more interested in using it as a phone to be honest, I guess I'll discover more of it's capabilities as I go, but I can't see the data being an issue for me,,. over the last year my most data intensive month was only 100mb.