I will be going to Italy in December and just got a new iPhone 3Gs with AT&T
can the Sim card be replaced with one in Italy so don't have to pay the crazy high Roaming fees.

I got is so wont have to always carry my laptop.

A new 3GS !, you wild crazy, must have the latest technology dude

If the 3GS is unlocked, there shouldn't be a reason why now

The voice call roaming isn't too bad. Only $1/min if you are on the Int'l plan. It's the data that kills. And, no, if you got the phone from ATT as far as I know you cannot unlock for use on another network unless you jailbreak or use an MVNO (Mobile Virtual Network Operator). AT&T and Apple will not unlock the phone or provide you the code.

Here are a couple of useful links:
http://www.flyertalk.com/forum/trave...phone-3gs.html
https://discussions.apple.com/messag...50685#11050685

Are you on iOS5? If so, there is a tethered jailbreak available, but I'm not aware of any unlock available yet. You're only option is AT&T World Traveler feature for $5.99. Data plans are available starting at $24.99 for 50 MB.

If you got if from AT&T it's locked to AT&T. The only way to use a foreign SIM is if the phone can be jailbroken and unlocked. If it has the most recent firmware i.e. iOS 5 you probably cannot unlock it.

If it is a new 3gs from AT&T (with their FREE promo with contract reup) it will have ios 5. You could always get a use one from online sites like cowboom for about 150$, that would most likely have 4.1x-4.3x on it and chances are good that you could jailbreak and unlock and then be able to easily use it out of the country. From there, just get a free SIM from AT&T to use domestically.

Hopefully Team Dev will have jb and carrier unlocked released in a few weeks. Whatever you do, DON'T upgrade to iOS 5.01. You can then hack and use third party carriers in Europe. The process should be fairly simple and straightforward.

I've got another post here regarding the iPhonetrip simcard for AT&T iPhones. I've used it twice now, and despite significant reservations (Too good to be true? Recommendations from FT users with very few posts?) the darned thing works!

I just got back from China where I used it in my iPhone4s and a jailbroken iPhone3G. Why both? Because the jailbroken 3G becomes a fantastic WiFi hotspot using the $19.99 (one-time fee) MyFi utility. So when I need to use my laptop, I place the sim in the 3G, and when I'm doing light day trips (no laptop) I put it into the 4s.

They have a 1gig (total use) plan for $7.99/day, minimum 1 week, and an "unlimited" plan that runs $11.99/day (and actually has a 7 gig/week cap). I started with the 1gig plan and got nervous it might not be enough so while in China I sent an email and converted it to the higher plan. Didn't need to though, because even with pretty heavy use (constantly using maps, various location apps and more... basically anything you'd like to use an iPhone for while traveling) I still came up with less than a gig over a 9 day span.