Question about sim card / changing phones

My wife currently is an AT&T subscriber. She is not a big fan of her current phone. She has a friend who recently upgraded and does not need her original phone (Also an AT&T / Cingular phone). My wife would like to get the phone from her friend. Would she just be able to get the phone from her friend and put her sim chip in her friends old phone, or would she have to go to AT&T and have something done with the phone?

Hope I didn't make this sound too confusing as I haven't had this issue before as I am a Sprint user (Yes, I know it is strange that my wife and I have different providers).

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all she would have to do (as long as it wasn't an old "blue" legacy at&t phone) was put the sim card in and voila, it works. at&t doesn't activate the phone, only the sim.