An update on this thread.

I know it's a bit out of date, but I scored an unlocked iphone 4 for 60 bucks from a buddy. This is wife's main Xmas present. I will have to take her SIM card, and attempt to cut it to a micro SIM. It should work, but fingers crossed for this Xmas eve work. I'm going to slip it in her stocking, and call it the next morning after the initial wave of presents.