iPhoning it in

My dad gave me his 3gs. I told him he should not ship me the SIM and he should wipe it completely for security purposes. He kept the SIM but did not wipe it.  While walking to the car after picking it up, I wiped it, wanting a clean slate to have my adventures.

Wiping it means it needs to be activated. Hoping to bypass this I jailbroke it using Greenpois0n. Easy enough to do but that didn't activate it. So I had to create an iTunes account, install iTunes and connect the device.  iTunes now wants a SIM. I ordered an AT&T from eBay for $3, then iTunes shot me this note:

It needs to be a SIM from Movistar. Thanks a lot, Apple, for imposing this restriction. Why not unlock previous generation phones?

I've tried uploading a firmware I found on the Pirate Bay using Redsn0w but with no success, I'm not even sure it took and there doesn't seem to be a way to gather any of this information while it's unactivated.

What I find most frustrating is the lack of clear information and terminology. What is a baseband and how does it relate to firmware? Cydia, Jailbreaking, unlocking, hackivating, tethered?  All of these by themselves, I understand. But combined with no centralized structure, a lack of correct spelling, a commitment to acronyms and when the names of the apps are called greenpois0n, Redsn0w, ultrasn0w and Pwnage Tool it's just difficult to tell where I stand.