Same thing on my orange upgrade to iphone. Received new microSIM and phone on Monday 7th Nov. Registered microSIM and activated iphone with no problems. Come Thursday in work, I get "SIM failure" message. Rebooted the phone which resolved the issue. However, when I got home that night I synced with itunes and updated to 5.0.1 as prompted.
Phone kept saying "SIM failure", "no SIM", "no network" etc etc
Only time I could get the phone to work was when I rebooted whilst connected by USB to my laptop. Even then it only lasted about 10 minutes max.
Called Orange on Friday (call centre closes at 10.00pm), who have never even heard of the issue. Said they would send a new microSIM out. Foolishly I agreed as I should've just went to the store.
Anyhow, went to the Apple Store in Glasgow on Saturday who assured me the phone and software update were not the cause but the micorSIM. They showed me that the microSIM card's gold contacts were not clearing the edges of the microSIM holder tray and, as it was touching the contacts, had damaged the microSIM by shorting it. Incidentally, since leaving the store, my phone has refused to connect to my network completely.
Get the new microSIM tomorrow which will hopefully resolve the issue. Out of interest, I tried shaving some excess plastic off one side of the microSIM so as it cleared the tray's sides, which did't work. I'm now apprehensive as to how this is going to go tomorrow.
Thought I'd post as I couldn't see similar problems or Apple Store advice resolving this issue apart from tedious setting changes (airplane mode on and off, change carrier setting to manual, remove SIM etc) and frequent rebooting.
Just check your microSIM dimensions once in the tray. If you can't see a gap between the microSIM and the tray, then this could be the problem.