Thanks for all your help and advice with this, I'm still looking at options especially with regards to 3G and GPRS.
unclenelli - I use 0845 6614681 to call Tiscali. o2 just deduct time from my contract mins, I've never paid for a connection. I got this number from Tiscali years ago before broadband, as BT wouldn't allow 0844 to be a friends and family number.
Superpilot - great deal from T-Mobile, I doubt o2 have such an offer but my contract is up shortly so it maybe time to switch operator.
Seems I had my phone set to the default of dual network mode and automatic searching. This always seems to prefer 3G. Changing to GSM and manual works as a stopgap for the moment.
I also didn't realise for voice calls etc, when outside the UK, if you change to manual and browse the available networks it is possible to get a UK provider and only pay the standard call costs instead of international/European charges. My friend did this in Amsterdam and connected to Orange instead of the default. He had to forgo his free mins as he was also on o2 but still saved himself a fortune!
Will keep you updated on any further progress
Thanks
Shelley