14 DAY TRIAL // It looks like there are many ways to skin an iPhone, and those who are unhappy with the standard offering have quite a few choices. Whether it is activating the iPhone in pre-paid mode rather than the usual contract, canceling your subscription to AT&T or just hacking the activation process, there are many ways to enjoy an activated iPhone.
The thing is that an iPhone once activated will still retain all of its functions except calls, voicemail and SMS even if you remove the SIM card or cancel your service with AT&T. This means that you still have full access to all the other features such as music, movies and the internet via WiFi. For those who want an iPhone without the phone, this is the perfect compromise. Alternatively, for those who still want to keep the phone capabilities but don't intend to use them that much, there is the option to stick with the pre-paid subscription thus avoiding the contract but still being able to make calls should you want to.
Users have discovered that if they have bad credit, or if they have some third party credit security in place, AT&T's activation method will automatically offer them a "Go Phone option." This is not a pay-as-you-go method, like the traditional ones, and it will still require a credit card, which will be billed monthly. The main difference here is that there is no two-year contract.
Perhaps the extreme method of getting an activated iPhone, without any subscription or even sending any information to AT&T, has been made available by DVD Jon. Though a little hex editing of iTunes, and hostfile tinkering as well as a use of little program called 'Phone Activation Server v1.0' you can fool your iPhone into thinking that it has been activated without it ever sending any information beyond your computer. This does not actually unlock the phone so that it may be used with any carrier, but it does make all of its non-phone functions available.