Chosen Solution
Can I still use WiFi and sync with iTunes?
yes you can use the iPhone without a SIM card and just use Wi-Fi - I did this for a while with my 3G when I first got my 3GS however, you will need to make sure the iPhone is already activated before you do this, e.g. if you wipe all the data off the iPhone and restore as a new phone, you can’t use it until you activate it with your SIM card. But after that you can remove the SIM.