Seems like the competition is really hotting up. T-mobile offering 600mins 500texts, 3GB data + Unlimited Landline (or any other booster of choice) all for £7.50 on a 12 month contract. This has got to be the deal of the century for medium users. I think the deal expires tomorrow. Here's the Hotukdeals link: http://www.hotukdeals.com/deals/t-mobile-simo-half-price-7-50/774393
I think the giffgaff deal is fine as it is, if caps are introduced then they will need to look at it again.
They are unlikely to tempt people away from contracts as most contracted users are there for the phone they get
There is no other PAYG service that offers uncapped data usage, and as smart phones are becoming more and more popular, then the service is very attractive.
Though as smart phones become more and more popular, and more and more people discover just how basic Mobile Internet is, more and more of those new users will stop using it.