This is what the T mobile bird said:
Matilda: Hi there, my name is Matilda I am part of the dedicated T-Mobile Online Sales Team. May I ask if you are enquiring about a new contract or an upgrade today?
Jason: hi, cool name
Jason: quick question, on the pay as you go tariff it mentions unlimited internet and texts. define unlimited?
Matilda: Thanks a lot Jason, I appreciate that.
Matilda: Sure thing! You get unlimited access for browsing (Emails, Facebook, Myspace, Flickr, etc...) and 1GB for downloads (Music, Games, Videos and Applications) every month every month.
Matilda: Since our customers mostly browse the web through their phones, we call it unlimited as browsing is unlimited
Jason: so i coudln't just randomly surf the net on a phone then? i'd get charged for that?
Matilda: Without this deal it would cost £1 per day. On pay as you go we also offer boosters (5 days of Internet for £2.50, 30 days for £5 or 6 months for £20)
Jason: ok, but on this deal can i surf any website? bbc.co.uk, google, etc etc?
Matilda: You can indeed, any website Jason
Jason: cool

Jason: so with the unlimited texts, what's the cap on those?
Matilda: It is unlimited to a maximum number of 200 contacts. So you can send as many texts as you'd like to a maximum of 200 Mobile Numbers/Contacts
Jason: that's pretty good

Jason: do you know when you might possibly be getting the iphone on t mobile?
Matilda: Possibly by March. We will only know for sure towards the end of January.
Matilda: Thank you for your time today, have a nice day.
Thank you for chatting with us.