Activation Mode

Really new to this, so sorry if i havent got the facts correctly!!

Recently got given an iPhone by my boyfriend, who kindly changed it so my SIM would fit the phone. I got home and tried syncing it up with iTunes on my Mac, and it's gone into activation mode. I can't connect it WIFI, nor server, as it doesnt show that option. Wifi wise, it just doesnt connect.

Ive tried switching it on and off, taking the sim out etc and its not working still. It had been working previous to me coming home and trying to sync it with iTunes. It said software update, so i clicked it, and it seemed to work then too... Any other suggestions as to why its not working and how i can fix it?

Thanks