Use iPhone as iPod Touch?

My wife just got an iPod Touch as a gift. She was debating if she should try to swap it out for an iPhone. The problem is she has a BlackBerry through work which she needs to have and has no choice. She would like to have used the BlackBerry just for her work emails (data plan only) and then use the iPhone for everything else. The guy at AT&T said that's not possible unless she sets up another phone plan.

So now the only other option is to get an iPhone and use it like an iPod Touch (no voice or data plan). She will be changing companies and this way she's have option to use it like an iPhone later (with a phone + data plan).

So the question is, can the iPhone be used without a phone plan or data plan and just as an iPod Touch. I have an iPhone and perhaps I could take my sim out of it, pop it into a new iPhone(if my wife gets one) and activate it and then take the sim back out? Will that make the iPhone the same as an iPod touch.

Any help will be appreciated.