Personalizing an old iPhone, set up?

I just bought my friend's old iPhone and I had several questions

First if I wanted to use it as an touch would I just not pay for the plan, or data? Or is there a process

Second is there a way to set it up to my account without deleting all of their music?

Third how do I set it up to my account?

You can use it as an ipod touch with no plan, just use it over Wi-Fi if thats what you want.