Success. My problem was that the version of Safari in iOS 5.1.1, did not like the T-Mobile activation pages. I tried and had success with Mercury Browser.
How the process went for me.
1. Connected to T-Mobile 3G signal
2. Opened Mercury Browser (great Safari alternative) and attempted to go to Google.com
3. Redirects to the T-Mobile activation page and from there you choose to activate your Mobile Internet Device
4. Select the register for new account and fill out some personal information: address, birthday, phone number, email, password.
5. Select the 200MB free plan
6. Agree to the T&C and confirm
7. Check your email for the T-Mobile Confirmation emails. Very important to save and note the Device # they assign you which is essentially your device's phone number. Mine came with the area code that my address is. T-Mobile requires this phone number/device number as well as email and password when you log into My T-Mobile to check your usage, change account information, buy more data, etc.
I haven't seen how the process works on iOS 6/7, but I think it is simpler since there is a View Account option that iOS 5 does not have. Perhaps someone can clarify what happens with newer iOS versions.
Going to the T-Mobile store was useless, they said I could only activate online now for this plan and could not do in the store.