Sim card/restore /emergency call error

Hi guys
Tonight I had a convo cut short as the iPhone battery needed to be recharged (I did get a %10 battery power left" message.
So, I get home, plug into iTunes and get a this:
USB cable to iTunes in background, and message says:
Restore Needed
Iphone cannot send or receive calls. Restore from iTunes.
www.apple.com/support
Great. I have no idea why this idiotic message comes up. So I connect to iTunes again, and the error message on iTunes says: iTunes cannot activate your iPhone because it cannot find my sim card or a SIM PIN is required.
Disconnect your iPhone, make sure the SIM is inserted correctly, tap unlock BLAH BLAH..
I have NO SIM PIN.
I cannot restore as the guys at Apple.com/support suggest because the SIM Card cannot be found. I have tired the home/off button thing.
I have NOT unlocked this iPhone.
I am very angry, and am close to smashing it into the wall.
Any ideas as to hat is going on?
iTunes 8.1.1
IPhone 3G 16gb 2.2.1 firmware

Hi there. I had exactly the same issue a few days ago. I took it to an Apple store and the Genius took the SIM card out and put it back in, then reset it back to factory settings and restored the firmware. I then had to resync it to my own Mac. I think he just followed the instructions that are somewhere on the Apple support site.
Hope this helps. Andy.

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