Here is a little gadget that can make life with a GSM phone much easier. It isn’t the first of it’s kind, but it is the cheapest option out there.

It sits between the card reader in your phone and your sim card, and tricks the phone into accepting any sim card you want.

I’m not 100% sure how the technology works, but it looks like it fools the phone into thinking the SIM card is the one it was made to accept.

There are a few caveats:

1) There is a tiny chip soldered onto the flexible circuit board, and in some mobile phones this means you can’t fit the sim card in the reader. The solution is pretty easy; cut a small hole in your sim card!

To make the hole, I use a $1.50 single hole puncher from Staples. Naturally you’ll be punching the hole in the side of the sim without the electronics or gold plated contacts.

2) It doesn’t work with every combination of phone/sim card - I’ve tested it in quite a few phones, and I’d say that 9 out of 10 times it works just fine. It’ll make a T-mobile sim work in an iPhone, and an AT&T sim work in a T-mobile Blackberry. A long list of phones that have been tested with this product can be found here.

Surprisingly I found that some really cheap prepaid phones seem to block this trick, apparently the operator is scared of people using their $15 phones when they shouldn’t.

3) Sometimes you need to reset your phone - I’ve noticed that some phones work fine for a day or two, then they’ll suddenly claim the incorrect sim is inserted. In those cases I’ve simply turned the phone off and on again.

4) It doesn’t actually unlock the phone - as nice as this solution is, it isn’t a permanent way to unlock your phone. You’ll always need to keep the device between your sim and the phone.

All in all a great little product, under $10 and handy to carry abroad if you need an easy way to use your own sim in a foreign phone (or the other way around). It even comes in a convenient carrying case.

You can find the “i-smartphone 2008″ at Dealextreme.com. It costs $8.77 and ships for free. Please do be patient with Dealextreme as they ship their products from Hong Kong and delivery can often take up to 3 weeks. If you need it really fast, you can select EMS Express for just $20.