This may sound stupid BUT …. Will my True unlocked Iphone work in the U.S.A. using a NON ATT&T SIM card????

Yes provided its a GSM network (AT&T and Tmobile) and you can get a SIM card on their network. You will need to check their websites to see if they will issue a SIM card without signing a long term (usually 2 year) contact for service.

Just to address the alternative: AT&T and T-Mobile have prepaid SIM cards you can buy.

The T-Mobile ones are about $17 on ebay however you cannot use data with an iPhone on T-Mobile (that's what customer service told me).

AT&T has some prepaid plans too, http://www.att.com/mygophone however I believe you will need a credit card (possibly US) and a US delivery address.

I am in the USA with a True iPhone right now.

AT&T has removed the data option from their prepaid cards. That is, it's still there, but not working for iPhones. There are conflicting reports as to how exactly they did that; customer service is so bad I didn't want to call again. It was $20 for 100MB which wasn't really very cheap anyway but it sure was better than nothing - worked last year. One service rep told me they want all iPhones to switch to their expensive contract plans. Another one told me the prepaid data is only going to work for WAP (and so basically totally useless).

T-Mobile doesn't offer data on prepaid at all.

The USA is a banana republic when it comes to mobile phones.

The USA is a banana republic when it comes to mobile phones.

Have to agree with you on that one. And an expensive banana republic for mobiles as well. I always have a spare phone for travel and in nearly every country I go to, getting prepaid service is as easy as popping in to a local convenience store and buying a SIM card for next to nothing. Minutes are cheap, and top up cards are everywhere. But in the USA, it's nearly impossible to get just a SIM card, so you end up having to buy a phone with the card, and the minutes are really expensive after that, and top up cards are hard to find. I've started referring to the US pre-paid phones as "flush phones". I buy the cheapest phone kit I can find just for the SIM card, flush the jurassic phone that came with it, and pop the SIM card into my spare Sony-Ericsson. Having a look at the pre-paid phones at WalMart is sort of nostalgic. I haven't seen anything like the old clunker models that they sell with them in years anywhere else.

I haven't looked into buying a SIM card on Ebay, but that sounds like too much trouble. Does anyone know whether simply buying a SIM card (only) and top up card has gotten any easier or cheaper in the USA? I was in Honolulu several months ago and enquired at a T-Mobile stand in a shopping mall about buying a SIM card only, and they quoted me $60 just for the SIM card!