How to get my Iphone 4s to work?

So my friend lost an iphone then got a new one THEN found the old one… So now i have it. How do i get it to work without getting tracked or going to jail or something like that?

Can I get an external hard drive for my iPhone 3G?

I need to connect to my iTunes on my computer in order to upgrade my apps. The only problem is that my computer crashed. I can use someone else's computer to connect to itunes, but I will lose my music. Does anyone know if there's an external hard drive for an iPhone 3G and if so how would I put my music on it?

Is there a wristlet that will fit an iPhone that has a thin case on it?

I want to be able to carry my iPhone in a wristlet so that it's safe and I don't have to worry about two separate items. I have a Vera Bradley wristlet, but it really doesn't fit my phone WITH the case on it, and I need to have the case. I was wondering if there were any wristlets out there that were made to fit and iPhone that had a case? I've seen some that have a build in case, but I need to be able to quickly take the phone out when necessary.

Should I get a ipod touch or an iphone?

I really need to upgrade my ipod classic - its hardware/battery is really starting to fail. I also have one of those phones free with my verizon plan… Its really crappy and simple. Should I keep my regular phone and just get Ipod touch to replace or get the iphone?
I'm looking into what's coming out in september…

Added (1). I also don't have a lot of money and am saving for college - is and iphone and the plan going to break the bank?