Using my 3G as an Ipod now that I upgraded to iPhone 4

Hi,
I hope this has not been asked before but I have 3 questions.
1.) I know I can use my old 3G phone as an iPod touch. What will happen to my purchased apps, are they no longer valid?
2.) Do I just plug it into my computer and have iTunes treat it as a ipod?
3.) My wife upgraded too, can I pass her phone down to my kid?
Thanks.

This has been discussed before, but I'll tell you what I did.
When you activate your new iPhone, the old one is automatically deactivated as long as you have kept the same phone number.
To use the old phone as an iTouch you should pull out the sim card. You can sync the old phone to iTunes just as before and you will not lose any apps. When you sync your new phone you will see all your prior purchased apps downloaded to the new phone.
You also have the option when you sync of selecting the "Apps" tab in itunes and selectively remove those apps you may not wish to use on the itouch. Removing an app in this manner only removes it from that specific device, not from your purchased library. So you can mix and match apps across various devices.
I also suggest that when you first sync the old phone as an itouch that you change the device name as well simply by clicking on the name. My 3gs is "iPhone" and my old 2g is "iTouch".
When or if you get an iPad you will also see apps synced to it when hooked up to iTunes.
As for all other functions that are built in to the phone, by pulling the sim card you cannot use it as a phone or do any of the cellular functions (remember, you have substituted the new phone for the old). The iPod function remains along with your music. Remember that if you purchase new music on the new phone or through iTunes, that you need to sync the old phone to have the new music downloaded to it.
Hope this answers your question.
Enjoy your new iPhone 4 (I don't qualify for quite awhile). I'm jealous!!!

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