From TUAW, it looks like after you have activated your iPhone you can swap out the SIM card with an inactive SIM card to create a 4gb or 8gb touchscreen iPod. What about the phone you ask? Your out of luck unless skype can create some kind of application for the device.

From TUAW
“What did I discover? I found that your activated iPhone is a lot more flexible and powerful than AT&T and Apple admit. Pop out the SIM or put an inactive SIM and your iPhone works pretty much like a contract-free WiFi-enabled 6th Generation iPod.” Tested without SIM, with invalid SIM, with activated SIM from pay-as-you-go phone. WiFi & sync work

read more | digg story

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