"restore needed", then subsequent "no sim" problem

I purchased an iPhone in the US, and installed sim card. It has worked fine for at least a month. I am currently in China, and the phone has functioned just fine. When I woke up this morning, the phone said I was unable to send and receive calls, and that I needed to restore.
I plugged in phone to restore, but computer locked up on me almost immediately when restoring. Once rebooting computer, and trying to go to iTunes to resolve issue, it is now saying it cannot backup phone as there is no sim installed.
I will be in China for another week, and am lost without phone and business contacts. The authorized reseller here was not helpful, advising they could not help.
Any ideas?

Welcome to the discussions,
carrier locked phones will only work if you insert the SIM provided by the carrier, in your case AT&T.
If your SIM gets damaged, you'll need a replacement card.
If someone modifies the software to be able to use another provider, a restore will put the phone back to the original status, which would be carrier locked for the U.S. iPhones.

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HT3960 My iPhone will not update. it keeps asking me to restore but then says there's an internal error -1. At first it wouldn't update saying there was no SIM Card. This was a used phone that i had the SIM Card replaced

Got a used iPhone4 to replace my lost one, had the screen replaced and then had the SIM card replaced by Best Buy.
They had issues in the store connecting to iTunes but the Geek Squad where they wiped it and said all was good.
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Perhaps try the Error 1 or -1 advice from the following document:
iTunes: Specific update-and-restore error messages and advanced troubleshooting

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is it necessary to put in sim card in iphone at the time of restore ? My phone is stolen and i am concerned that if somebody will restore it then i will not be able to find it even using find my phone.

There is no way that you can locate the iphone at all.
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Very sorry. Your iphone is gone.
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Error 1600, 1601, 1602: Try the following steps to resolve this error:
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Hi,
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Both of you can try this out and see if it works. The method below will put your iPhone into DFU mode:
1. Connect your iPhone to your computer and open iTunes.
2. Hold down the sleep and home button (ignore power off slider) and continue to hold for 7 seconds after the screen shuts off.
3. Let go of the sleep button, but continue to hold the home button. The screen should stay black while in DFU mode, if it turns on try the process again.
4. iTunes should pop-up saying that there is a iPhone in recovery mode.
5. Try restoring now.
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Hey 35Cotton,
I understand that you're encountering SIM/service issues on your iPhone. I would run through these troubleshooting steps to resolve the issue:
Update your iPhone to the latest version of iOS.
Toggle Airplane mode On and Off.
Try turning iPhone off and then on again.
Check for a carrier settings update. Tap Settings > General > About. If an update is available, a prompt will appear.
Remove the SIM Card and verify that it is a valid, carrier-manufactured SIM. Also verify that it is not damaged, worn, or modified. Then reinsert it.
Restore the iPhone.
If you still are unable to resolve this issue, contact Apple support for further assistance.
from: iPhone: Troubleshooting No SIM
http://support.apple.com/kb/TS4148
Welcome to Apple Support Communities!
Take care,
Delgadoh

I'm trying to use my iphone 3g as an ipod now that I've upgraded to an iphone 4. But it is telling me that I need to have a sim card in my iphone 3g to use it. I don't want to use it as a phone at all so I wouldn't think that I need a sim card.

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Go up to the top of your screen on iTunes and click on 'Store'. Then go down to 'Authorize This Computer'. That should cover part of it unless you've already authorized a bunch of other computers to use your account. If that's the case, you'll have to go to one of those computers and click the button just below it to 'deauthorize your account' from that computer. If you're not able to access the store, check your internet connection to make sure you are connected. Hope this helps.. good luck!

"restore needed", then subsequent "no sim" problem

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