Unlocked American iPhone in UK on Orange Network?

Basically my issue is thus...

I currently have a pay monthly contract with Orange that doesn't end until May 2010 and unfortunately my current phone appears to be on its last legs.

I have family in America and I have considered asking them to pick me up an iPhone (because they're immensely cheaper over there) and send it to me (in the UK) and I'll repay them. The idea then would be to unlock the phone and use my Orange SIM card.

Would this work?

I've asked this question to a few friends and one of them said that a salesman in an Apple store in America said it would work but it would damage the software so it would be pointless. I don't know how true this is because I can't understand why it would but at the same time he could have just sold her the phone and gotten the commission which suggests there may be some truth to it...

I'd appreciate any help.

Thanks

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