How to prepare my 3G for pay & you go for my girlfriend?

I had the original iphone, then upgraded to the 3G and gave my 2G iphone to my girlfriend on O2 pay as you go. Now i've just upgraded to the 3GS and want to do the same for her. I can't for the life of me remember the sequence I need to go through to take the phone back to it's original state, so she can then put in her O2 pay & sim and setup on her computer. Any advice would be appreciated.

Presumably she doesn't need a new sim card, her existing one from her 2G iPhone will be ok for the 3G?

Thanks