Question : Problem: How to use my extra iPhone as an iTouch (without Activation)

I upgraded to the 3G iPhone, and now want to use my original iPhone (non-3G) just to purchase/download applications, purchase music, etc
Has anyone (or everyone?) done this? Here's the basic questions that I have. I didn't want to just try it for fear that I might mess up the data/apps/contacts/etc on my new iPhone:
1. Can I download the new SW for the old phone, so that I csn doenload/run appliacations on my non-3G phone
2. Can I Sync the "old" iPhone with iTunes so that I can have all my Music and downloaded Applications on my old phone as well? (It seems to have Internet/Wireless still, even though the DIsplay appropriately says "No Service", since there is no carrier/ATT on this phone). I guess that would man having 2 iphones Synced to 1 iTunes.

Answer : Problem: How to use my extra iPhone as an iTouch (without Activation)

Yes, you can sync multiple iPhones with iTunes without any issues, and you can upgrade your old phone to the latest software.

However I've only done this with jailbroken phones, so I don't know if both phones need a SIM card. But you can go ahead and try it since there's no risk.