First of all, join Top Cashback (if not already a member!) and once logged in, search for T-Mobile. PAYG handsets currently give you £10.10 cashback. This changes in 3 days, so check this carefully against Quidco if you are reading this after 27th June 2011.
Click through to the T-Mobile site, and search for the Pulse Mini, there is Black and Pink, so choose carefully. The price is £19.99 but this includes 6 months Internet Booster, normally this costs £20, and gives you 6 months of 500mb fair use each month, and they will not charge more if you go over, but might reduce your speed for the rest of the month.
You do also have to pay £10 top up, which stays on the phone as a credit, so overall cost of the deal is £29.99 with £10.10 cashback, so, under £20 for an Android Smartphone, 6 mths Internet, and £10 worth of credit, not too bad. OK, the Pulse Mini is a bit crap, but for the money, or as a cheap hotspot, its workable.