Turning First Gen iPhone to an iPod touch (Helping out a Hot Friend of mine..)

Hey everyone I’m hoping someone here can help me. I have my friends first generation iPhone that she bought from another friend. It doesn’t have any Sim Card in it but she only wants to use it as an iPod touch..(Unlocking the phone is what I’m trying to do right? Is that the right term?) She asked me if I could get it to work and I told her I would try. Now I know a lot of you will tell me to search but Im very new at this and a lot of info around the internet seems to be outdated.

Right now when I connect the phone to my mac iTunes tells me “There is no SIM card installed in the iPhone you are attempting to activate.” Can someone help me or at least give me an hint as to what I have to do?

BTW I don’t know if it’s relevant but whatever I do on her iPhone will be done on a Mac, but once I give it back to her she is going to sync it on a PC. I own a PC so if I have to I can do whatever I have to do on it.

Thanks to whoever helps me

***Note: I do not know which firmware the iPhone is running but I would her to have the latest one. Dunno which one that would be though

 

This failed, it says I have to connect it to itunes click the restore button but all I see is the "no sims card in phone" message.

Edit: even if I skip this step and launch redsnow all I get at the end is a blackscreen, I reboot and then it shows me the connect to itunes/slide for emergency calls. When I connect I get "no sims card in phone" again.