I had a feeling I should have clarified my answer.
Mrplow is basically right, but the portion he missed is that after you buy an iPhone you will need to get a sim card from somewhere. I could be wrong, but I think the phone HAS to be activated BEFORE you can jailbreak and then unlock it, thus you will have to get micro-sim card A before you can do all that and THEN you can put in micro-sim card B (your Virgin one).
Take note that the iPhone 4 and 4S use MICRO-sims, not regular ones. As Mrplow said, you might be able to cut down a regular one, but the usual caveats about that apply. I'm assuming your Virgin pre-paid sim is a regular one.
It IS possible that you could buy an unlocked iPhone directly from Apple, then contact Virgin and arrange to get a micro-sim that has your "old" number on it. That would solve the problem as well.
I agree with the above members comments. I actually bought a pay as you go iPhone in UK from Orange, for example. They allow you to hold it for 3 months and then they will provide break codes from apple to allow you to factory unlock it.
Downside is slightly higher call prices for 3 months
Upside, the phone cost 100 pounds cheaper and it eventually is factory unlocked.