My iphone 4s can text, no service?

So my dad bought me a brand new iphone 4S. However, where-ever he bought it from, it was AT&T. So when I tried to put my T-mobile sim card inside, it did not work.

There's a sub card or something until you put your real sim card inside though.

I would use the iphone to play games and entertainment since i can't call or text (at least what I thought)

My little sister called me today, asking if my iphone had unlimited texting, and I was thinking "wtf."
I tried calling with it, but it didn't work. However, texting does work.

Can someone explain this to me? Is it okay if I allow her to continue texting my other cousins with it? (They also have a iphone if you're wondering)

Added (1). When I tried putting in my T-mobile card, it said the carrier was not supported and it would stay on that screen. So I would put the other sim card back it(the sim card is orange or something, and i'm pretty sure it's a temp sim card)

Added (2). And I'm wondering, if I let her continue texting. It wouldn't really be charged on our bill, right? If I'm thinking correctly.

The AT&T 4S needs to be unlocked and then it will work. You can only text since you're most likely using iMessage under an email.

Using Wi-Fi

When you are texting you should see a blue tint, and the box you type in should say imessage in it and not text, then you know its free