AT&T upgraded my Dad's iPhone 3 to the 3GS, but the upgrade left him with an iPhone 3 that he couldn't use. Knowing that it is impossible for me to turn down obsolete or broken equipment, he offered the old phone to me, and of course, I took it.
It's been working just fine as an iPod Touch, giving me an iPod that keeps up with my iPad in terms of sharing and storing data. It's not iOS 5 compatible, meaning it doesn't work with iCloud and some of the other new features, but everything else works well enough that it's become a pretty neat tool, and really convinced me that me next phone needs to be an iPhone.
The main problem has been that it still thinks it's a phone, even though the SIM chip has been removed, which means it tries to connect to AT&T before it will sniff out a wifi signal. I had just been suffering through this, letting it tell me it can't find a signal every time I fired it up, but I found a hint on Minimal Mac that fixed this: airplane mode.
I went into settings and put the phone in airplane mode, then backed out and turned the wifi back on. Now the cellular part is disabled, and it is only looking for wifi. At this point, it is practically an iPod Touch, which is what I was hoping to do with it.
Now my only problem is how to divvy up my limited pocket space. It feels a little silly to have both an iPhone and my cell phone in my pockets at the same time. Considering how few calls I get or make, it might be time for my phone to start living in my satchel instead of taking up pocket space.