I worked on these. The phone's price is subsidized into the card pricing, so they would loose money if you could do that. They had us design them that there could be no swapping (they are locked to the pay-as-you-go sims). Unlocking requires both software and hardware modifications - at least the phones we made.

This must be a recent development, because I made extensive use of this trick (1-2 years ago?). Specifically, the $10 walmart ATT go phones worked fine with the contract (3G) SIMs.

I can comment on this. My wife is on tmobile and my father is on ATT, both are using prepaid phones with swapped SIM cards. I know the Virgin mobile phones don't use SIMs (to my knowledge) as well as Tracphone, so those are useless.

If you don't power it on with the SIM card, they usually work.

The cheap $10 phones are locked to only operate with specific networks.

And?

Unlocker at dealextreme.com for $5 -- works on most nokia phones. go on att.net and buy a nokia gophone for $20 or so, use the unlocker, and you're good to go.

Since you're already on AT&T, go to best buy and pick up one of those motorola gophones for 15 bucks. They work with the regular AT&T SIMs.