bchar26 Sorry but it sounds like your phone is locked to another network. Your phone needs to be unlocked to all networks or locked to O2 only for it to work with a giffgaff SIM.
Please see this KB article How to unlock your phone. If you have an iPhone then syncing it to iTunes might unlock it.
You might want to look at this MoneySavingExpert page as well.
If all else fails then you will need to ask whichever mobile operator the phone is locked to (for the most reliable and permanent unlock) or take it to a phone stall/shop to have it unlocked.