I am in the process of selling my first generation iphone after upgrading. I have used the reset facility on the iphone to reset it and now when I plug it into my PC, it requires activation. Is this the state I should sell it or do I need to activate it for the new owner just to be able to insert his sim card?

 

If you activate it you will have to sign up to a new contract, you will have to jailbreak it in order to sell it otherwise there is no point in anyone buying it 2nd user

 

If they're on O2 it'll work just fine.