Replacing my old iphone with a new one, need guidance/help please

Hello fellow iPhone users.
This is my first post on these message boards ever so please excuse me if this has already been discuessed before.
Recently a friend of mine dropped my iphone pretty badly and it got scratched up except for the screen however he offered to replace it for me by buying me a new one. I insisted he didnt need to but now its too late because he already opened the box. My question is, what is the process I have to do to activate my new iPhone and deactivate my old one? Can someone explain to me the steps involved in this process?
Also, how can I transfer all my contacts that are only on my iPhone to my computer so that I can transfer my contacts back again to my new phone? Also, how can I transfer all my bookmarks on my older iPhone to my comptuer so that I can send them to my new phone? Is there any clear cut easy way to do this process? Any help is much appreciated.
Essentially, what I want to do is restore all my settings, text messages, email settings, wifi hot spots, bookmarks, images etc etc on to my new iPhone while restoring my older iPhone to its blank factory condition.
Thanks a bunch

iphonefan1,
To transfer your information from your old iPhone to your new iPhone, you are going to want to do a few things:
1) Backup any information on the old iPhone to your computer. You can use Windows Address book or Outlook (2003 or 2007) to backup contacts and Internet Explorer to backup your bookmarks. You will need to import any pictures you have taken on the iPhone to your computer (they do not sync) or email them if you would like them saved. Sync your old iPhone with iTunes so that it will make a backup of your text messages and other preference information.
This article describes what information can be directly synced from your iPhone to the computer:
http://docs.info.apple.com/article.html?artnum=306071
2) Take your SIM card out of your old iPhone and put it into the new iPhone. This takes all of your ATT account information to the new iPhone so that you will not have to run through a full activation again. You will have to run through a mini-activation, but all of your information will already be set up.
3) Connect the new iPhone into your computer. As part of the mini-activation process, iTunes will ask you if you want to restore your iPhone from the backup. If you say yes, then it will use the preferences from your old iPhone and put them on the new iPhone. You can then sync any information (contacts, bookmarks, photos, etc.) that you backed up on the computer from the old iPhone to the new iPhone.
This article will help you import the data on your computer to the iPhone:
http://docs.info.apple.com/article.html?artnum=305741
4) Once you are confident that all of your information has been transferred from the old iPhone to the new one, you can restore the old iPhone and that will put the software back to factory settings. That will also erase all of your old data. (This process cannot be undone, so please make sure you do not need any information off the old iPhone before you restore.)
Hope this helps!
Jennifer B.

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