Forgot my IPhone passcode. Tried restoring it several times, but it won't work. Can it be because the phone is not "in service" and has no sim card? i simply use it for music and pics.

A SIM is required to activate it. It does not have to be tied to an active line of service, but it must be present. If the phone is carrier locked, the SIM must be from the carrier it's locked to.

It does not have to have any cellular service associated with it, but it will need to have a SIM card in it to complete the restore. You can use the old SIM if you still have it.