Lost phone-is mobile me

I have or had the 3gs and it was stolen out of my purse. I was running low on batteries so the mobile me "find my phone" is not working. (error message received " Your iPhone is not connected to a data network or does not have Push enabled.")
I still have my old iphone (first generation, how can i go backwards?) and have the option of reactivating my old phone and deactivating my 3GS
my question is: if i reactivate my old phone and deactivate my new 3GS, will i lose the ability to ever locate my 3gs? AT&T representatives seem to think so but it doesn't make sense to me why the mobile me feature would be tied to my cell phone# and not the physical phone.
any help is appreciated.

You need to report your 3GS as lost or stolen with AT&T, but it sounds like you have done so.
In order for the MobileMe "find my iPhone" feature to work, Find My iPhone must be enabled with your MM account on your iPhone, and Push access must be enabled on the iPhone. If your iPhone is powered off, there is no way for the find my iPhone feature to work via cell tower or GPS.
In order to re-activate your first generation iPhone, you will need to get a new SIM card from an AT&T corporate store. The AT&T store should be able to re-activate your first generation iPhone and if not, when you connect the iPhone to iTunes with the new SIM card installed, you will be provided the AT&T activation.
Copied from this link.
http://support.apple.com/kb/TS2734
Your cellular service has been terminated by your wireless service provider. *If you contacted your service provider to report your device lost/stolen before locating/wiping your phone, and they deactivated the SIM, you will no longer be able to locate, display a message on, or remotely wipe your iPhone.*

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