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Apple iPhones often liked to be synced with iTunes when a new sim card is inserted. I would suggested you switch phone off, remove sim card, connect your phone to iTunes, ideally on a PC/Laptop through a cable, then insert your sim and switch on phone (whilst connected by cable to iTunes) - see if that works?
Where did you buy your iPhone from originally, if it was Apple, then no worries, it will not be locked. If you had it from another source then it may have locked to first sim you inserted, if so, what network where you on before giffgaff? If O2, then should be ok, but if something else, then may be locked and syncing may not work, you may need to contact the network you were with and they will unlock for a fee - normally in region of about £20.
Hope it does help?
Hi just put my giff gaff sim in an O2 iPhone4 I can't seem to get any network for calling texting or Internet without being connected to wifi does this mean the phone is only locked to O2 SIM cards I was told that the phone had been unlocked from the shop I purchased the phone from, is there anything I can do to get the phone working?