OMG ITS FIXED!!!!
Apple actually did something about it.
I installed the update. When I went to activate my iMessage and facetime it just wouldn't work. So I followed Kevin's advice about resetting the network settings.
The phone then could not find my wifi network. So I restarted the phone. I connected to the wifi. Managed to activate iMessage and facetime after a couple of attempts and it work :)
One weird thing I noticed was that I entered my password wrong (as I forgot the number) on the iMessage screen but it still accepted it.
Just my luck. My new phone is due to arrive in 2 days (after ordering it 4 weeks ago) and facetime works after over 6 months of problems.
Good luck everyone :)