My O2 Nokia N95 worked exactly the same in Crete last year (Quad band) as it does here, so I can see no reason why and iPhone wouldn't.
Data usage cost a fortune (added an extra £50 to the bill just to look at a few pages/sites once or twice a week).
How much surfing? It would depend an the size of the page (and I do stand to be corrected by someone more knowledgeable on this) but I would estimate about 8-10 pages per Mb (about 100kb per page x 10). click here