Another solution, not so obvious
Hi all, I too had the same problem. Just happened today. Here's a little background. I switched from one service provider to another, ie. Maxis to Celcom. Upon switching, whilst maintaining the same number, I was not able to received calls, all calls would be notified as missed calls by sms to my iPhone. After speaking to support, they assured me this would be rectified. Also by switching my provider, when I make a call, a window pops up notifying me of 'Call forwarding is active'. Basically just ignore it and it goes away once connection is made.
This morning, I could received calls. However, my iPhone 3g 16gb ability to make calls ceased when I received a notice window on my iPhone stating, 'iPhone is activated'. I knew then it must have linked to my new service provider. So, I found this site and a lot of other sites discussing this problem, people stating its the phone and it should be replaced, etc.
I tried everything mentioned here, reboot etc. etc. even tried to jailbreak the phone using QuickPWN but that failed or I was not doing it correctly. Anyway, as I was restoring the phone, I placed my old, invalid SIM into the iPhone. This is with my first carrier, Maxis. iTunes launched, and a pop up dialog box prompted me to 'Update my carrier settings'. Never seen this before, so I clicked YES.
I then placed the new, valid SIM into the iPhone, and the 'Show caller ID' and 'Call Waiting' is now normal, no longer dimmed out and inaccessible. So, all is ok, and I can make and receive calls.
So, its to do with the carrier settings on the SIM or the service provider which affects the iPhone. Not sure what it does, but here is a suggestion, just drop in another SIM, borrowed from someone else phone and connect to iTunes, you may get a message prompting a, 'UPdate carrier settings'.
Hope this helps.