Now that I have a 3 GS, how do I keep using my old phone as an ipod?

Hi all,
I bought a 3GS the day they came out and have been using it exclusively, but I still have my original iphone and decided there was no reason not to let my kids use it as an ipod. It was working fine, they could get online with the wifi in our house, they could listen to music, etc, but tonight I tried to synch it on my computer to add a few new things to it and now it won't do anything but tell me it has no sim card.
I don't want to use the old iphone as a phone, I just want to use it as an ipod. I paid six hundred bucks for it two years ago, and see no reason why it should be useless now just because I bought a 3GS.
Can someone tell me how to get it usable as an ipod again? As I said, right now as soon as I turn it on it tells me there is no sim card and won't let me do anything and if I try to synch it, itunes tells me the same thing and says it can't activate it. If there was some way to tell itunes I don't want to activate it as an iphone, that would be great, but I can't seem to find one.
Thanks in advance for whatever help you can give.

Well, just got back from the AT&T store and my two older iphones are still competely unusalbe.
I explained the situation to the AT&T people and they were good about giving me two sim cards for my old phones. I took the cards home, put them in the phones, plugged my old phone in to try to synch, and itunes told me I had to register the phone first, and in order to do that I had to activate it/setup a phone plan. I don't want a phone plan for it. It's a perfectly good peice of hardware that I want to use as an ipod. Unfortuneately as soon as I cancel out of setting up a phone plan, it tells me to disconnect the iphone without allwoing me to synch.
I love the iphone, but I'm getting a really, really bad impression of Apple as a company. I shouldn't be having any difficulty at all in using either my wife's or my old iphone as an ipod -- we paid twelve hundred bucks between the two just two years ago -- but Apple has seemingly built in a failure mode that was activated the first time I tried to synch them after upgrading to the 3GS. They are both completely useless now. I'm quite, quite angry.
Does anyone know how I can get my old phones to synch again so that they'll do anything? I've tried with the sim and without the sim. I even tried taking the sim from my 3GS and putting it in my old phone just to synch my old phone, but my old phone wouldn't recognize it.
If anyone knows, I'd appreciate the help. Apple makes it just about impossible to get help out of them.
Like I said, I'm starting to get a very bad impression of Apple as a company. Now when I think about that Apple commercial that makes fun of Microsoft's customer service I have to think what in the heck are they talking about? At least I can call or email Micrsoft without having to jump through a thousand hoops and dig through page after page trying to find contact info. At least Microsoft's primary help network isn't reliant on customers helping other customers so that they (Microsoft) don't have to get involved.
Ok, I'm ranting now.

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