Can an iPhone be used w/o the phone service?

Would WIFI work? Would it be just like the iTouch? Or do you have to activate the phone service?
Thanks!

Well -- there IS a workaround...
You sign up for ATT service, activate your iPhone, and cancel your ATT account within 30 days.
The catch is, once you have activated your iPhone, then cancelled your account and removed your SIM, you can never update your OS software again -- i.e. if 3.1 comes out, then 4.0 etc you can NOT upgrade the software. It will relock your iPHone and wait for activation from ATT.
So if you are happy with your iPhone exactly as it is with the OS that you currently have, then you can use the workaround, and plan on never upgrading your iPHone's OS from this point on.

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