Going back to the original question.......
The iPhones on eBay appear to be pay as you go phones from Italy. They are sim free, network free, and geographically free if that makes sense! They are available there for €499 for the 8gb and €569 for the 16gb. Was playing with a colleagues one that was bought from TIM (Telecom Italia) was running on a Vodaphone UK sim card.