SIM Card Slot
On the top edge of the phone, in the middle, is a tiny pinhole next to what looks like a very thin slot cover (see Sleep Switch (On/Off)). If you push an unfolded paper clip—or the more refined, sterling silver "SIM eject tool" that comes with the iPhone 3G— straight into the hole, the SIM card tray pops out.
So what's a SIM card?
It turns out that there are two major cellphone network types: CDMA, used by Verizon and Sprint, and GSM, used by AT&T and T-Mobile—and most other countries around the world. Your iPhone works only on GSM networks. (One huge reason that Apple chose AT&T as its exclusive carrier is that Apple wanted to design a phone that works overseas.)

Every GSM phone stores your phone account info—details like your phone number and calling-plan details—on a tiny memory card known as a SIM card (Subscriber Information Module). On some phones, though not the iPhone, it even stores your address book.
What's cool is that, by removing the card and putting it into another GSM phone, you transplant the iPhone's brain. The other phone now knows your number and account details, which can be handy when your iPhone goes in for repair or battery replacement.
Apple thinks SIM cards are geeky and intimidating and that they should be invisible. That's why, unlike most GSM phones, your iPhone came with the card preinstalled and ready to go. Most people will never have any reason ...
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