Can I use an old iPhone as iPod after deactivating it?

[alfonsopulido]

I pre-ordered an iPhone 3G S, so next Friday I would like to give my 1st Gen iPhone to my daughter so she can use it as an iPod Touch. I read that it's possible but can somebody tell me what are the steps to follow?
I have a MacBook, but she has a Windows PC... Is it possible to remove all my music, contacts, videos, etc so she can sync it with her computer just as an iPod.? Do I have to remove the sim card? Will she be able to sync it and download software updates if it's deactivated?
Thank you for your help

 

[gr8tfly]

As long as you leave the original, previously activated SIM in the phone, it'll have full functionality (except for phone, obviously).

http://support.apple.com/kb/HT3406

 

[blurb23]

If you're worried about the SIM, you can hacktivate it via QuickPwn/PwnageTool.