Here's my understanding - with active SIMS there's two factors - the physical SIM itself including its electronics, and the mobile account associated with that SIM. I think it's the iPad account that's not compatible with the iPhone, as it's data-only (same as any mobile internet SIM).
However, if it's an unactivated SIM (i.e. there's not yet an account associated with it), then one SIM is the same as another, so there's nothing stopping you associating an iPhone contract with it.
This is just my understanding based on what people have said on here about their own experiences, as people do seem to have got previously unactivated iPad SIMs working in their current iPhones (with an adapter of course!)