Do I need CDMA service to complete the iOS 5.0 Update?

I'm deployed right now and I use my Verizon iPhone over wifi to skype and facetime with my family at home. I want to update this phone to the new iOS 5.0 software but I'm worried I might not be able to use my phone because i'm not in a service area. Since the Verizon iPhone doesn't have a SIM card, I'm under the assumption that the data is saved somewhere on the phone. If I were to do a restore, do I need to re-activate my phone or anything? There's absolutely no service here so I don't want to attempt the update and get myself locked out of my phone. Anyone know anything that can help me out? Thanks in advance!

I have the exact some thing happening to me.

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