You're welcome.
Why would I take the SIM card out of the iPhone when I upgrade?
Not sure, but some people do thinking they have to.
The iPhone 4 uses a micro-SIM card, which is smaller than the SIM card used with your existing iPhone. The SIM card used with your existing iPhone can't be used with the iPhone 4. The iPhone 4 will ship with a micro-SIM card pre-installed just as your existing iPhone shipped with a regular size SIM card pre-installed.
If your kids don't need internet access, you can leave Airplane mode enabled on the iPhones.
In case you decided to remove the SIM card for whatever reason is the reason why I included the part about having to have the no longer activated SIM card inserted in a no longer activated iPhone in order to install a firmware update when released, or to restore the iPhone with iTunes if wanted or needed.