Is old iPhone still usable as entertainment device after upgrading?

My wife and I both have iPhone 3G's that we're planning to upgrade to iPhone 4 units at the end of the month. Our kids are addicted to the devices as entertainment units.
After upgrading to iPhone 4, can we still use the 3G units just for playing games, etc? I.e. no phone service, just use it as a glorified iPod Touch? If so, anything special we need to know or do to prepare for the hand-off to the children?
Thanks in advance for your help.

You're welcome.
Why would I take the SIM card out of the iPhone when I upgrade?
Not sure, but some people do thinking they have to.
The iPhone 4 uses a micro-SIM card, which is smaller than the SIM card used with your existing iPhone. The SIM card used with your existing iPhone can't be used with the iPhone 4. The iPhone 4 will ship with a micro-SIM card pre-installed just as your existing iPhone shipped with a regular size SIM card pre-installed.
If your kids don't need internet access, you can leave Airplane mode enabled on the iPhones.
In case you decided to remove the SIM card for whatever reason is the reason why I included the part about having to have the no longer activated SIM card inserted in a no longer activated iPhone in order to install a firmware update when released, or to restore the iPhone with iTunes if wanted or needed.

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Is old iPhone still usable as entertainment device after upgrading?

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