Can I transfer an AT&T Pay As You Go plan to a micro SIM card?

I wanted to use it on my iPhone 4. I know I wouldn't be able to use data (internet) outside of Wi-Fi, but that's not a big deal. As long as I can talk and text.

I tried asking one of the Wal-Mart Wireless employees about it, but they just gave me a brain dead look and said "I dunno" (go figure, Wal-Mart).

I don't see why not. I did a Google search about it, and all's it told me was that, as you stated, wouldn't be able to use data outside of Wi-Fi. You could probably just go on the AT&T website and use Live Chat to have a representative switch the plan to the new micro SIM. Although, you might have to purchase a brand new micro SIM card because you can't have an old plan on it when you switch to PAYG.

The size of the SIM does not change the plan or the services that are offered by your provider. If you have a regular sized SIM, you can ask your provider for a mini version or you can make it fit the iPhone yourself.

Edit:
Found something even better a video with a template to cut the SIM