Vodafone NZ has had a few cases like me ... Similar except that mine is activated, but still unable to connect to phone service, apparently due to the mishandling of transferring sim cards off prepay onto iPhone contracts.
I was told just to keep trying every few hours, turning the phone off and on, and they suggested '48 working hours' which was kind of annoying with release so close to the weekend! My prepay sim on my old phone did stop working so I've been without a phone completely since buying the iPhone ... Slightly ironically. Hopefully sorted some time this week.
Meantime, indeed, go the incredibly expensive iPod Touch

!