Try using this link to set up your Xperia.....it worked for me.
ANDROID - http://bit.ly/jitbandroid
Tweakker helps Giffgaff customers connect quickly and easily to the Internet and MMS services.
If your having problems with your phone signal you can check to see what the signal strength is like in your area before you commit to giffgaff or to check if there is any masts down or ongoing maintenance.
O2 Service Status.