The iPhone was introduced in an exclusive association with the AT&T network. There were no possibilities to use the phone with other providers.
Engagdet now shows a video of an unlocked iPhone that actually uses a T-Mobile SIM card and claims that it will completely function with any SIM card. This is good news for people outside the US for they can now buy an iPhone and use it with their own local networks. Engadget says the phone remains 100% functional but there's no word on how future Apple updates will react to this development, if the visual voicemail still works and how things like the internet connection and other tailored services react.