The EMF from an iPod touch would be just as hazardous, or just as non-hazardous, as that from a cellphone. The only difference is that an iPod touch wouldn't be held to one's ear, and that can be accomplished by using a headset with the cellphone, something most cellphones support.
She should also be aware that Skype charges for calls not made to other Skype users, so she might or might not experience a savings over her current cellphone bill.
What's the latest iOS the original iPhone can use?
You should keep the SIM for the iPhone as you will need it if you ever need to restore and reactivate it (you need a SIM in in to activate it, but not use it once activated). iTunes will upgrade to the latest available for you (3.1.3, I think?).
Also note that in the USA at least, as long as there is a SIM in it, it will still be able to make 911 calls, even with no plan associated with the SIM (federal law).
Oh, and skype requires an iPhone 3G minimum - won't work on an original iPhone.
Radiation from cell phones can possibly cause cancer, according to the World Health Organization. The agency now lists mobile phone use in the same "carcinogenic hazard" category as lead, engine exhaust and chloroform.
Before its announcement Tuesday, WHO had assured consumers that no adverse health effects had been established.
A team of 31 scientists from 14 countries, including the United States, made the decision after reviewing peer-reviewed studies on cell phone safety. The team found enough evidence to categorize personal exposure as "possibly carcinogenic to humans."
Perhaps I'll sell it and use the money to buy a crowbar to help you pry your head out of your butt.
Group 2B, in which the WHO categorizes EMF as "possibly carcinogenic", also includes things such as orange oil, pickled vegetables, talc-based body powder, titanium dioxide (recommended by many medical organiations as a safer sun block), nickel (the metal), and coffee. Rather a "catch-all" of possibilities, and while not to be dismissed, not exactly a damming statement. If you read the full monograph, it says:
"The evidence was reviewed critically, and overall evaluated as being limited among users of wireless telephones for glioma and acoustic neuroma, and inadequate to draw conclusions for other types of cancers. "
The conclusion means that there could be some risk, and therefore we need to keep a close watch for a link between cell phones and cancer risk."
This WHO statement is therefore only a statement of concern and a call for additional study, not a definite statement that cellphone use causes cancer.
It's certainly her choice what risks she wishes to avoid. We all make such choices regularly, about all sorts of risks. But an iPod touch is not likely to be much less of a risk, if any, that a cellphone,
I did not say that such concerns are crazy, only that the WHO report is not confirmation that such concerns are at this time supported by concrete evidence.
Not at all sure why you bring up email. Since you stated that your friend was interested in Skype or another VOIP solution, that seems irrelevant to the question at hand.
Getting back to the OP:
1. Nothing wrong with awareness of cellular radiation, but if it's a big problem, better not have a cell phone ever.
2. Skype won't run on the original iPhone. I would use it as a media player, make calls/SMS, or use the Remote app to control an iTunes library (if the device can run it).
3. Leave the SIM card in there. You may need it.
4. The latest version of iOS for that phone is 3.1.3