Hi Chris,
I recently signed up with three on the above deal you mentioned (though I think that the deal you mention expired at the end of April). I got the latest and smallest 3 fone, the Nec e616. Its a really good fone, plus you get free football highlights for a month!! there is a problem with the sim card as PaulR mentioned meaning that you could only use another three handset if you decided to change fones. With regards to network coverage, i have my fone set to 2.5G which means that it is not capable of streaming video on this setting it will always be capable of making voice calls and text like a normal fone, i have never had many problems on this setting and if I have ever lost coverage, my fone just roams over to o2 or any other UK network.
Hope this makes sense??
Nis