Sorry back at a PC so can answer you now.
What you explaining sound a lot like the problems I had with my original Desire ie: Hardware. Have you tried sending it in for repairs?
What I would do 1st is to do a Factory reset to confirm that its not some app you installed? If that doesnt work send it in to get looked at as that is in no way normal, not even for stock.
On custom ROM's
Best one I found to date is MIUI, all the other ICS builds have issues with either camera or bluetooth not working, in some cases both. As for normal Gingerbread ROMs there is a couple that look nice esp the ones with Sense 3.5+ on them. I have tried many but always found myself returning to MIUI. In fact its so bad that I have an Xperia S lying on my desk(not in use) because of MIUI.
Also I would not recommend rooting and flashing it before you had your phone sorted, as it can make things worse if you phone decide to die halfway through a flash.
Thanks Dude,
Have factory reset it a few times already. Phone is from UK (ebay buy) leaf won't touch it. Had it with a person in Cape Town that advertised on gumtree that says he does repairs and he couldn't find anything wrong with the phone. At the moment the only app I have running is 3g watchdog and APN droid (goes with watchdog) tried without these two and the problems persisted. Thinking the hardware is busted. Doesn't really matter that it's UK phone Vodacom would most likely have simply said that it was drop or water damage like they usually do.... I will hang on till ICS comes out beginning July and if that doesn't work switch to Miui to see if it resolves the issue.