Why does iTunes think my SIM card is unsupported? I recently bought an unlocked iPhone 4 from the US. I live in the UAE. I had a normal SIM card and I cut it and installed it into iphone and it started working.

But when I tried to upgrade to the most recent iOS version using iTunes, at the end of the installation it says Your SIM card does not appear to be supported.

When I went to my carrier office they gave me SIM card which works in their iPhone (UAE) but it does not work in my iPhone (US).

I am worried about what happened to it. I bought it just one week back. Now I am not able to even start it; it's not detecting my SIM (which is working in other iPhone).

Any idea what the problem is? What should I do? Shoud I format it?
If the handset was unlocked using UltraSn0w, then you have completely removed it by updating the firmware to the latest version (Ultrasn0w only supports iOS 4.3.3). Worse yet, this has updated your baseband and that cannot be reverted even if you manage to downgrade the OS (unless you used Pwnage Tools or Sn0wbreeze as they can preserve the baseband during update). If this is indeed the case, you have now a locked phone to whatever carrier it was purchased under (AT&amp;T) and you will have to talk to that carrier for a "hard" unlock.

To my knowledge, a "true" unlocked iPhone has no geographic limitations. As long as the network supports GSM phones (read: SIM cards), then there should be no problem.