How would a 3G iphone work if unlocked?

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Black Blade asked:

So I am trying to decide between getting an unlocked 3G iphone and an iPod touch. If I got a 3G iphone and unlocked it (and had no service), could I use the GPS? The 3G internet? The new apps? Also, how hard is it to get a iphone 3G, not get service, and unlock it?

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