OK I used to work prepayment energy accounts (not with British Gas). I'll just explain kind of how they work to get over this pay as you go thing so people understand it for the future cos it's handy to know.
Basically like people say - your meters DO still get read like normal (and replaced when they're of a certain age). You have an account on the central database like any credit meter customer - but whereas they register payments when their montly direct debit goes out, or they send a cheque in with the bill - when you go and stick a tenner on your gas or eleccy card or key or even those paper tokens they're trying to get rid of but still float around from time to time - it registers a payment of a tenner on your account on the computer system, and tells your meter to let a tenner's worth of gas or electric through into your house (less any debts or standing charges the meter's set to collect, or emergency credit you've used). So every time you top up you're building up a little nestegg of a balance on your actual account on the system.
Meter reader comes round, and your bill gets produced - and provided the meter and the computer system are charging at the same price (this used to be a bit more of a problem before key meters) - the amount the bill comes to is the same as the amount of credit you've got on your account... balance goes back to zero and you sit at home wondering why the company's sending you bills saying you owe them no money. There are ways it can fall out of sync which is how people end up with debts despite being on prepayment meters - things like missing payments, or people borrowing other people's cards (again was a problem with those card tokens that you used to have to spend hours persuading the meter to take properly) and the like - but generally that's how they work and why you do still get the meter reading man around even though you might wonder why the hell he's showed up at your door.
We used to cringe so much when other call centre agents not in prepayment compared them to pay as you go mobiles!
I don't work there anymore - things have probably changed but that's the general principle how the accounts run (the job was shit and I hated it)