Doesn’t sound like its unlocked. Take to the “man that can”. You should then hook it up your computer and iTunes and make sure it’s upto date software wise (iOS) and put any music etc you want onto it. iPhone 3 is getting on a bit now so some of the newly released features and iOS won’t work but you still see plenty of them about.
The 3G/Gs is getting on now, as jambalaya says, but its still perfectly usable. GPS works ok, you’ve got a perfectly good iPod Touch there, but with the nav and telephone functions added. Nice freebie. Stick Shazam on it, and MotionX-GPS, and enjoy.
Got given an Apple 3 a???? last night that was on Vodafone, it is meant to be unlocked. Stuck my O2 sim in it and it said no service. Does that mean it isnt unlocked? Can I unlock it myself or should I take it to a man that can.