Your phone must be jail broken and unlocked to use non AT&T sim card. Be sure you have correctly installed redsn0w and ultrasn0w unlocker. If you have recently updated your phone that will undo your jailbreak and unlock. You will need to reapply them for the version of your iPhone OS if they are available.
Is your sim brand is the same as the company you bought the iPhone from? cause iPhone is locked to some carrier you can't just use any sim with it. If you want to use any sim with it you will have to unlock it. Now try to use your friends sim that come from the same carrier you bought the iPhone. Good luck and hope this help.
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