CrunchGear

The folks at hacktheiphone have figured out how to use any Cingular SIM card in the iPhone, regardless of type or service plan. Heck, you can even drop an old one in there that doesn’t even work.

See, phones depend on something called the IMEI to know if you’re using another network’s SIM card and account. While this is a fairly rudimentary explanation, because the iPhone looks for certain numbers in the IMEI to activate itself, you can’t just pop any SIM card in there. Disabling this system is actually quite hard because the code that does it is signed and will explode if tampered with. However, if you perform the hack and drop in a Cingular card, you’re golden. It’s really drawn out and actually kind of useless — basically it lets you use a considerably cheaper Cingular plan with the iPhone, if necessary — but it’s a cool exercise in GSM security hacking.

Process
More info at TUAW