I had the same question, a little different. I had an iphone4, not quite elligible for upgrade. Bought my daughter a 4s, ordered myself a 5. So i had three phones three plans. by the time the 5 arrived, the 4 was elligible for upgrade so i upgraded the plan the 4 used to be on with a new, free, 4. so now 4 phones, three plans. use the 4 just like an itouch.
Went to set up the 4 without the plan and was having problems. would not update to iOS 6.0.1 would not access the app store. kept bugging me about not being activated (i thought this was Verizon wanting plan activation).
Thank you roaminggnome for your answer. While terse, it was the solution to almost all my questions....
wifi works great
app store works normal
apps work normal
syncs with iTunes and iCloud fine
i suppose the phone can still make 911 calls
I still have one question: How can you get a phone set up like this to use iMessage?