Sadly (for you), Apple only activates the OS on phones that have a current valid wireless account. The official answer is to keep the valid SIM with the device and take the SIM off the account when selling/donatinge the phone.
If you can't get that original SIM, you still have options.
You will need an active SIM card to get things activated. (And likely that phone is locked to AT&T - so it will likely need to be an AT&T SIM) If so, the easiest is buying a $6 SIM from AT&T and they have stores all over the place.
Once activated through iTunes, that SIM will work to activate that device in iTunes even if the account expires or that SIM card is no longer active. It's often free or inexpensive to get a new SIM on an existing phone.
Why not loan your iPhone to a friend for a day/week/whatever - they can use their SIM and if they forget to get the SIM back at the end and need to go to AT&T for a new SIM - you'll keep the SIM you need, and they won't be funding your calls.
You will find many people in large cities that will do this for a small fee (provide a good SIM - watch you activate the line and then either cancel that SIM or just use a prepaid plan SIM and give you the balance as part of the transaction)
You can also jailbreak and/or unlock the device, but that can be more work asif you worry a newer OS arrive andmight tempt you have to re-do thatthe jailbreak or unlock work.