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 straight into the hole—or the more refined, sterling silver "SIM eject tool" that comes with the iPhone 3G—the SIM card tray suddenly 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 that 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 to open this tray, unless they just want to see what a SIM card looks like.
Note
You can't use any other company's SIM card in the iPhone—it's not an "unlocked" GSM phone (at least, not officially; there are some unauthorized ways). Other recent AT&T cards work, but only after you first activate them. Insert the other card—it fits only one way, with the AT&T logo facing up—then connect the iPhone to your computer and let the iTunes software walk you through the process.
If you were curious enough to open it up, you close the tray simply by pushing it back into the phone until it clicks.
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