In answer to your questions :-
1) Possibly, but no deals announced yet. The iPad isn't SIM locked, so it's quite hard for them to enforce such a deal though.

2) No. The phone functionality is firmly disabled. You can use Skype on it though.

3) Yes, using Skype as mentioned above.

Will the networks be selling this like a phone, eg £30/month for 2 years with insurance/data?

Can you make normal mobile phone calls with it? I know it's massive, but with a bluetooth earpiece and this in your bag/case it's feasible.

Can you make phone calls at home over your wifi connection with it?

Not sure how you make out that UK data plans are a rip-off, they're actually cheaper than in the US of A for lower volume use. The AT&T plan costs £10 for 250MB or £20 for "unlimited" (which turns out to mean 30GB in AT&T speak). In the UK £10 gets you 1GB (4 times as much) and £15 gets you 3GB.

If you use 3 as your provider (and I can't see any reason why their SIMs won't work) you can get 1GB for £5 and 15GB for £20 (with unlimited Skype for both).

So, providing you're not shifting stupid amounts of data, you should be able to get your data for the same or less than in the US of A, AND that includes VAT.

Its called VAT and currency exchange rate you idiot, how can you expect things to be priced the same as the US?
Stop winging troll

and the brits get a special bonus - an 18% higher price tag than america!

more than enough reason to boycott the damned doorstop