Status: Got Iphone 2G (First Gen) OS 3.1.3 Wiped clean + fresh SIM card + Itunes 9.0
Itunes recognized phone and asked me to select the 20$ unlimited Data plan.
I selected it and filled out the rest of the info linking it to my account where I already had a dumb phone with no data plan and trying to replace that line with the Iphone 2. Something happened during the final part where it said my connection to itunes timed out but the connection was fine.
I've gotten two emails from Itunes saying:Service Activation complete and activation complete.
The phone hasn't yet activated (says no service) and my att account doesn't have the updated data plan or phone on it yet. Granted I didn't start trying to do this till like 10PM on a Friday and I got the latest activation email at 1:25 am. AM I doing something wrong or should I just wait till morning?
I signed up just to answer this as I had something very similar happen. I actually was intending to use my brother's old iPhone 2G for the remainder of the quarter I'm in before I upgrade so getting service on the phone was so important that I spent five days trying to figure this out. It has taken:
Three corporate AT&T stores
One online AT&T rep
Two Apple Customer Service calls
One Apple Genius Bar appointment
One hour AT&T call that was transferred to Apple
Two and half hour call with Apple
One hour call with Senior Advisor
Escalation to a Senior Engineer
Two calls back from a second Senior Advisor
I got bounced back and forth a lot over the first few days

. The last 60 hours were the most productive, though. My guess is because I got a lot of people with kids and I'm sure parental instincts kicked in as my mom was starting most of these calls (I can be called in on in my dorm, I just can't call out). After trying just about every troubleshooting thing and being told the issue was a hardware one by Genius Bar (they were incorrect and this was confirmed by the first Senior Advisor), the second Senior Advisor found one troubleshooting thing I hadn't been told to try. He was kind enough to pass me the exact process he had me do in an email so that I could share this potential fix. It did work beautifully for me, but it might not be the issue others are having. It's worth a shot, though.
(Note that I've cut out the actual first step since it just required running a diagnostics in iTunes. It's not really necessary if you already know you're having a network connection error in iTunes. So where it references back to step #11, it actually means step #10)
- Open Internet Explorer.
- From the Tools menu, choose Internet Options.
- Click Connections.
- Under "Dial-up and Virtual Private Networking," choose "Never dial a connection." It may not be possible to choose this if you’ve never used dial-up Internet; if this is the case, skip to the next step.
- Click LAN Settings.
- In the window that opens, enable the option to "Automatically detect settings" if it is not enabled.
- iTunes uses Internet Options proxy settings. Apple recommends removing proxy settings that interfere with access to the iTunes Store if needed.
- Click OK.
- Click the Advanced tab.
- Scroll down to the Security section and look for the option to "Check for server certificate revocation." If it is enabled, disable it.
- Look for Use SSL 3.0 and Use TLS 1.0. Make sure at least one of those two checkboxes is selected and click OK (You can select both checkboxes).
- Apply any changes, and restart your computer if you modified the option to "Check for server certificate revocation" (step #11).
I had the network connection error messages through the whole activation process. I got all the correct emails. AT&T showed the correct data plan, but the wrong phone. The phone would not finish activation and was stuck in the connect to iTunes/emergency calls only screen. I don't know for sure this will help, but it certainly is one more thing to try before going to the trouble of attempting the whole activation process from the beginning again.
I have not tried this on my 7 machines, but this was tried on my Vista 64 bit desktop. I was using the latest version of iTunes.
EDIT: And obviously this will only work if you're trying to activate through a Windows machine
