Quote:
Surely its my phone and I should be able to do with it what I please? And in the UK, didn't Ofcom say that phones could not be prevented from being unlocked?


Yes, it is indeed your phone, and Apple is not forcing you to update. This isn't a secret update over the air, it's one you have to click yes and a few other confirmations to get.

The root of the problem is that the unlocker programs modified the radio/modem firmware on the phone to allow other SIMs, and the 1.1.1 update Apple released also updates the firmware on the radio. For some reason, the two changes clash and cause the phone not to work with any SIM properly. And thus far, no one has figured out how to get back into the OS X side of the phone to poke around, so the issue can't be repaired.

Also, since the phone is not officially sold in the UK yet, UK laws wouldn't apply to this situation. In the US, there is a current DMCA exemption allowing users to unlock phones, however, this hasn't been tested in court yet to determine if it also means providers can't relock phones.

For me, I'm sticking with 1.0.2 firmware for now, since I find having my own custom ringtones more useful then being able to buy songs from the iTunes store. Apple will need to come up with more compelling features for me to want to upgrade and lose what I currently have. Some of my coworkers here didn't care much and have already upgraded, and (as expected) no problems for them on 1.1.1, even if they had hacked the phone to allow 3rd party programs.