How to activate new SIM card in iPhone 3gs?

A friend of mine has just given me her old iPhone 3gs. I reset all the settings and data and inserted my SIM card from my previous phone. However nothing happens when I do this. I can't make calls and if I try to call the number it doesn't work. Do I need to activate it or something? The phone seems to register that there's a sim card in there because when its not in there it comes up saying there's no sim card.

The phone needs to have the SIM circuit unlocked. It's probably locked to your friends carrier.

Call your service provider for assistance. The question you are asking can only be fully resolved by your service provider.