At the minute you're asking an extremely vague question so I don't think anyone knows how to answer it.
If you're only going to use the phone occasionally i.e. emergency use mainly; then you should go PAYG. However, if you want the internet which, in my opinion is a pain in the backside on most phones and very expensive, a 12 month contract may be better. Why does it need to be on Orange or O2 - most networks offer contracts with 'any network, any time' minutes.
If it absolutely has to be Orange or O2, then go to their retail outlets and pick up the brochure and work out what kind of handset you want or ask a salesman for advice on what you want it for. I really hate motorola handsets and stick to mainly Samsung and Nokia, so you need to find what's easiest for you to use. BUT, don't buy straight away - you then should compare at various other retail stores or online when you know which handset you want.