You must have a sim in the iPhone to activate it. The sim does not
have to be associated with an active account; but if the iPhone is locked
to a wireless provider, the sim must be from that wireless provider.
Once the iPhone is activated, take the sim out and see if the wifi works.
If it doesn't work, then you will know that you need a sim in the iPhone
for wifi to work.
Even if it were stolen or not we should be able to use the phone.
I on the other hand use my iPhone for my music but wasn't able to put any new music because i needed the update. I used to use it when it was jailbroken for T-Mobile but switched carriers. I just did the update and now it's stuck on the activate screen that I won't be able to change since the friend I bought the phone from has moved. How am I supposed to fix that?