UPDATE: The SIM functionality (there appears to be no user replaceable SIM) appears to be controlled through the iTunes store. Very interesting. 

I am not a cellphone hardware engineer but it seems ridiculous to support EDGE and support CDMA which is what Boris is implying ("If the iPhone is, indeed, a CDMA phone, then the whole will the iPhone be locked to Cingular question is a bit moot: without SIM cards, you can't take it to another network.") but hey we could both be wrong. More likely, the iPhone is GSM and uses EDGE data and the SIM instead of being user replaceable is hardwired in the first version of the iPhone. The soap opera continues :-) !

FROM The Mossberg Solution - WSJ.com:


But the iPhone has a major drawback: the cellphone network it uses. It only works with AT&T (formerly Cingular), won't come in models that use Verizon or Sprint and can't use the digital cards (called SIM cards) that would allow it to run on T-Mobile's network. So, the phone can be a poor choice unless you are in areas where AT&T's coverage is good. It does work overseas, but only via an AT&T roaming plan.

In addition, even when you have great AT&T coverage, the iPhone can't run on AT&T's fastest cellular data network. Instead, it uses a pokey network called EDGE, which is far slower than the fastest networks from Verizon or Sprint that power many other smart phones. And the initial iPhone model cannot be upgraded to use the faster networks.