New iphone, now what to do with the old one

I am sure I am not the only one that picked up the new iphone after having the first one. My kids love to watch disney shows that we bought through itunes on my phone. The goal was, to use my old iphone as an ipod and let them watch the shows on it. itunes will no longer let me change the media on that phone. Is there a way to have itunes recognize this old phone as just an ipod to synch? Its crazy to have a 400.00 paper weight now as it should still play video even though its not used as a phone. You should not have to have the phone activated to use the other features in it like the ipod touch has...

I saw an earlier post that said you could do this. To clarify how, make sure there is no sim card in the old iphone if you want to use it as an ipod. Not sure why AT&T put my new sim card from the new iphone in the old iphone? That was the problem. I just updated the old iphone with videos and it appears to work fine.

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