Good lord, folks. Let me break it down for you.
This phone is NOT unlocked.
TurboSIM is a film that goes between your SIM and the phone's SIM reader that spoofs an AT&T SIM identifier. So, it allows your SIM to register on the network.
The iPhone also does not have an appropriate activation token, which can only be obtained from AT&T by activating through iTunes. "Jailbreak" and "Hacktivation" are the current methods of making an iPhone usable without obtaining a valid activation token from AT&T.
You can use iLiberty or ZiPhone to get this token. Both programs will "Activate" your iPhone so that it can register on the network using your already-installed TurboSIM.
Alternatively, you can also use iLiberty or ZiPhone to unlock through software. It is your choice. If you unlock through software, the GSM radio does not need to be "spoofed", it accepts all SIM cards. At this point, you can remove the TurboSIM.
Please, for the love of God, restore in iTunes before trying any of this. Connect to internet, plug in iPhone, hit restore. This will automatically update AND restore the iPhone to 1.1.4 all by itself.
After this, proceed with the instructions I gave you above.