My iPhone 3gs says it has no service and cannot connect to wifi however says to connect to iTunes. When I connect to iTunes it says "there is no sim card installed in the iPhone you are attempting to activate. please disconnect and insert a sim card in t

Follow these steps to see if it resolves your issue: (from http://support.apple.com/kb/TS4148)

You may also want to contact your carrier for to make sure there isnt a issue with the carrier service.

1. Update your iPhone to the latest version of iOS.
2. Toggle Airplane mode On and Off.
3. Try turning iPhone off and then on again.
4. Check for a carrier settings update. Tap Settings > General > About. If an update is available, a prompt will appear.
5. Remove the SIM Card and verify that it is a valid, carrier-manufactured SIM. Also verify that it is not damaged, worn, or modified. Then reinsert it.
6. Restore the iPhone.

Hope this helps 🙂

OK. I'll bite...

Is there a SIM card in it? If not, then insert one. You can not activate it without a SIM.

If there is, then get a replacement SIM from your carrier.

You can not do so without a SIM installed in the phone.

Then either get it replaced or make an appointment at the genius bar and have Apple check the phone to see if there is a physical problem with it.