Phone buying advice

The time is coming for lovelybug to get a new Android mobile phone. My feeling is that it should be at least the same resolution as my HTC Desire (ie 480x800), and should be able to be a USB host - ie it should be possible to connect things like digital cameras to it and copy off the photos. Apart from that the most important consideration is cost, though a better battery life would be nice.

Any recommendations? Should we get a phone with a contract, or buy the phone separately and get eg this £10/month deal from 3?

Thanks!

Update: damn, very sorry to hear the USB host thing isn't going to work :-(