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Have you received a despatch email?
What does the order status say in My O2?
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Well this is another new excuse for a phone that probably wasn't in stock and O2 are looking for someone else to blame. 
There is no doubt @Anonymous should cut his losses and go instore and pick up a phone of his choice there....or even Carphone Warehouse (if Refresh isn't required)...
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To add...it would be interesting to know whether the OP paid any upfront costs for this cancelled order? if so he should be looking for a refund asap....?
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I would imagine that the OP had to pay up front. I've never heard of O2 sending out a phone that wasn't paid for prior to dispatch. The OP will, as you say, have to request a refund, unless the refund was automatically generated by the cancellation. The OP will have to check their account.
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Agree @Bambino though they did say it was an upgrade? I could have upgraded with no cost had I chosen a certain type of phone. As it was, I had bought mine sim free elsewhere so it didn't apply to me as I just went for a sim only tariff... 
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It just sounds like another case of taking payment and not being able to supply goods. Usually the only reason for O2 to cancel would be due to a credit check. My O2 should show order status.
