O2 prepay customer upgrading to Iphone

Hi,
I have been an O2 prepay customer for years and just got a present of my friends old iphone. I only ever spent about 5euro a month in calls and I'd like to do the same with the iphone.

Question 1: Is it possible to stick my sim into the iphone (after a restore\deauthorize) and start using just text and ring features without registering with itunes? (Girl in O2 shop thought it would NOT work unless registering with itunes).

Question 2: I want to remain an O2 prepay customer and want to use the iphone without the data feature turned on. Is this possible? (Girl in O2 shop thought it wasnt and said Id have to pay maximum 99c a day).

Thanks (I know very little about Iphones).

Not sure re the questions but why not just stick with your existing phone since you have no intention of using any of the main features the iPhone offers?

Well, its a very old nokia with no camera, it regularly fills up with dust and the screen is cracked and its fairly battered looking. Plus, since I now have the Iphone Id like to use it (minus the data charges). Thanks.

Yes you have to register via Itunes (no big deal, its all free).

You will have to get a micro-sim from an O2 outlet as your current sim wont fit the iphone4.

Not sure on disabling data on the iphone 4 however, thats kind of the whole reason to have an iphone as it has so many apps and is a bit like a mini-computer.

The iphone at a minimum of €600 seems a bit expensive if you dont want to do anything except make a few calls.

Other than that it will all be fine.

A friends old iPhone - it's unlikely to be an iPhone 4. If it's not your current sim card should work.

if it is an iPhone running with the iOS 3.x, you can just insert wrong setting for the cellular network. Navigate in Setting/General/Network/Cellular Data Network,you should find three fields that normally are empty, just insert a letter on them. The iPhone won't be able to access internet through the cellular network. The only downside is that everytime you connect the iPhone to iTunes an alert message will appear saying that an update for you carrier setting is available, just disregard it. If one day you'll need to use the cellular network for internet, just clear the above fields.