While the SIM card would work, you would still need to go through the iTunes Activation, which would either add the $20 iPhone data plan to your current contract, or just give you an iPhone plan comparable to what you currently have (whichever is cheaper), then restart your two-year contract with at&t. Once activate, you can take the SIM from the iPhone and use it in any at&t/Cingular or unlocked phone (to use as a backup).
TEG