New sim and iphones locked?

i installed a new sim card that's pay as you go into my iphone because my old services got canceled. ive had a contract for about a year until it was canceled so it had service before i installed a new sim card. anyways i installed the new sim card and it just says different sim detected and its says connect to itunes so i did.well once i connected it to my computer itunes pops up saying that i need to activate. odd because i already did but what ever ill do it i put in the number of the current sim card and it give me a message were sorry, we are unable to continue with your activation at this time please try again later or contact customer support. well first things first i tried putting in my old number instead of my new number to see if that would work but no it didn't so i contacted customer support and i couldn't understand a thing they were saying. so i tried again and again and now im just ****** off. if i install my old sim card my iphone will work but with the new one it brings me to the emergency dial screen. i know the sim card is activated cause i put it in a old phone and it had service. please help!

you might want to read this, looks like AT&T is no longer offering prepaid iphone plans, actually at&t never offered pay as you go for the iphone, you just jumped through a few loops to get it and now at&t has removed those loops:
http://www.tuaw.com/2009/06/15/atandt-to-discontinue-prepaid-iphone-plans/
http://www.wireless.att.com/learn/popups/gophone-customer-important-information. jsp
_*Important Information for GoPhone Customers_*
iPhone OS 3.0 Software Update available on June 17 may impact the data service for certain GoPhone customers using either an Original iPhone or iPhone 3G.
AT&T GoPhone rate plans will not be approved for use with iPhone 3G S when the new device becomes available on June 19.
_*iPhone 3G Users Currently on a GoPhone Account:*_
• *Neither the Pick Your Plan nor Pay As You Go rate plans are approved for use with iPhone 3G at this time.*
• iPhone 3G customers on Pick Your Plan rate plans should call 866-499-7888 to learn more about their options.
• *iPhone 3G customers on Pay As You Go rate plans should call 800-901-9878 to learn more about their options.*
_Original iPhone Users Currently on a GoPhone Account:_
• If you are a Pick Your Plan Customer with the required unlimited Data Plan for iPhone, you should not experience any interruption in your data service due to downloading the iPhone OS 3.0 Software Update which will be available on June 17.
• If you are a Pick Your Plan Customer who does not currently have the required unlimited Data Plan for iPhone, you will experience an interruption in your data service. To avoid this interruption, you should call 866-499-7888 to have the required Data Plan for iPhone added to your service.
*• Pay As You Go rate plans are not approved for AT&T iPhone customers. Customers currently using an iPhone with a Pay As You Go rate plan should call 800-901-9878 so they can move to an approved rate plan with the required unlimited Data Plan for iPhone.*
If you are unsure of your rate plan, you can visit www.att.com/gophone and login under Account Management. Upon logging in, you will find account details.

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