Use old iPhone after upgrade?

I bought a new iPhone and transferred my data as described here http://support.apple.com/kb/HT2109, and new iPhone is working great. Is it necessary to erase all data on the old iPhone? Can I continue to use the old iPhone as an iPod Touch, keeping all my old apps and music on it? What will happen next time I sync it to iTunes? Will there be any mix up between the two phones?

"Does this mean that when I buy an app on one device that it will also be available on the other one after syncing both of them to iTunes?"
Yes, as long as they sync using your iTunes account, you can d/l apps to many iPhone/Tounch devices.

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