IPhone 3gs shows no Sim Card installed in newly unlocked phone.

My uncle has just givin me his old I phone 3GS which was locked on Orange.
He has paid for the phone to be unlocked and orange have emailed over the confirmation that it is unlocked and how to unlock it.
This is where the problems start.  Windows recognises that there is a phone and I tunes tries to activate the phone but it cannot and the No Sim Card installed message appears (even though there is a brand new Tesco I phoen sim).  I have taken the phone into recovery mode and restored from there, however this has still not resolved the problem.
Once the system restores the software the phone restarts to the menu screen and the same message appears.
HELP!!!!!!!!!!!!! it is so frustrating.

"The SIM card inserted in this iPhone does not appear to be supported"

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