Facetime Without Sim or Network?

1) is there a way for facetime to work without the sim card and/or without a network?

Yes. FaceTime works via an available wi-fi network only.

2) what happens if I cancel my contract with the network?

The iPhone's phone number is registered with the FaceTime server, so you need a phone number but having a connection with the carrier is not required to do a FaceTime call, but an active phone number is.

3) can i use skype and is that the best way?

Skype can be used.

4) does skype need a network or only wi-fi?

I believe Skype is supported via the cellular network - when connected to a 3G network with a particular carrier.

You can test this now. Turn on Airplane mode with your GF's iPhone followed by turning on wi-fi access. All other iPhone radios will be disabled except for wi-fi. When the iPhone is connected to an available wi-fi network, do a FaceTime call. This should work and if so, the same should apply anywhere else, but the iPhone needs a valid/active cell phone number registered with the FaceTime server.

Facetime works BUT u need a SIM in the phone even if it's not active on a network. I just tried this.

I used skype 3G to 3G about 1hr ago. THe other person was in a moving car.
It worked BUT not nearly as well as facetime. The video/audio were not in sync. Funny enough the video would freeze up then every minute or so would do like a FAST FORWARD and zoom through everything I missed like i was fast forwarding a DVD or video tape. Odd. IT was interesting but not as engaging as facetime.

Then again IM STILL without facetime working on tmobile USA. Wont activate.

Been looking at options. Perhaps android. Hoping apple fixes it as our company wants to std on video conf platform. Facetime working on ipads and macbooks as well as iphones was looking VERY attractive.
Apple needs to just attach it to email addresses. Especially since these do NOT change when u travel from country to country and buy cheap prepaid SIMs when u land (ie Europe, Asia etc)