Youtube not work.

The only way to bypass that is doing a jailbreak on the phone to bypass activation. Instructions here

My Youtube Channel
Live Technical Support

This will tell you everything you need:

http://forums.tipb.com/jailbreak-unlock-forum/

Hi, there!
I am not understand you question. Do you want to jailbreak your Iphone???
Just please note: Jailbreak and Unlock iphone is 2 different things. But to unlock iphone so you can use in other network, first is Jailbreak.
If you want to Jailbreak your Iphone, go to youtube and search for "everything iphone pro" this guy does the video show how to Jailbreak very clear.
Hope this will help.
Thanks for reading

You only need to connect it to a computer to activate it. But it you don't have a legit sim, there's no way for you to do that. Your only option is to Hactivate it by jailbreaking.

Jailbreaking will depend on what iOS version is currently installed on your iPhone. To check, READ THIS TIP.

To proceed with jailbreaking, choose from the tips below:

• Jailbreak with redsn0w
• Jailbreak with sn0wbreeze
• Jailbreak with limera1n

For more tips and tricks for the iPhone, CLICK HERE.

To Unlock the I-Phone 4 use the Unlock code,.You can get the Unlock code here
http://www.prounlocking.com/apple-iphone-4/rs8wp9/ and Unlock it...I unlocked my I-Phone 4 from Vivo Brazil Network.

First option is to put a legit sim card. - this will be a problem if you bought your iPhone from another country.
2nd option is to jailbreak and unlock your phone. - if you've upgraded your iPhone to version 3.1.3, there's a great chance that you won't be able to do this option.
3rd option is to use a turbo sim which you can find on eBay. check out some items i've searched for you. - this option will work only if you have 2.30 or lower iPhone software version.
other than those 3, i don't know anything more.
For more iPhone / iPod touch tips, click here or visit my blog.

...

I FINALLY GOT YOUTUBE WORKING on 1.1.4...
Step 1: backup your settings and files on itunes
Step 2: restore iphone to default( this will erase everything)
Step 3: try Youtube before Jailbreak to make sure its working
Step 4: ***important*** run ziphone for JAILBREAK only!
YouTUBE remains working. when I tried to DO-IT-ALL youtube never worked afterwards.
Step 5: Sync iphone to get your settings, contacts, emails back

download idemocracy from here http://www.iphone-hacks.com/downloads/category/all and navigate to youtubefix, connect your iphone and execute....should work now!