Activating old iPhone

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I have an old iPhone (1st gen 8gb) that I do not use. The screen is slightly cracked, but does not interfere with normal operations. I am currently using another iPhone (also 1st gen 8gb). My question is: If I move my sim card over to the non activated iphone, and activated it via itunes, and then move my sim back to my current phone will there be any issues? I want the older one to be able to be powered on and be able to use the apps and iPod features. Does anyone see any issues with doing this? Will AT&T charge me an activation fee or anything funny by doing this?

Essentially I want to be able to have the one phone used as an iPod touch, and keep using my current one as normal.
 
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You can jailbreak one to use it effectively like an iPod touch. It'll let you "activate" the phone and then you can disable the cellular radio and continue using the Wi-Fi and Bluetooth radios. Much easier than what you're proposing.
 
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If you jailbreak an iPhone can it be restored back to standard Apple OS?
 
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Yes, a simple restore will wipe the jailbreak and you'll be back to factory settings.
 
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Are we allowed to discuss the jailbreak procedure here? Any suggestions? I've never done anything like that before.
 
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20" iMac 2.4 GHz, 4gb | 16gb white iPhone 3Gs | MacBook 2.1GHz, 1gb | 40gb AppleTV |
You can jailbreak one to use it effectively like an iPod touch. It'll let you "activate" the phone and then you can disable the cellular radio and continue using the Wi-Fi and Bluetooth radios. Much easier than what you're proposing.

I used PwnageTool to activate and jail break the phone. How do I go about turning off the cellular part? It says there's no service, and some of the stuff is not working. It says it's not connecting, while some stuff is working with the wifi others are not.
 

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