I'm using a prepaid T-Mobile SIM in an unlocked iPhone 2G and it works really well, except for the data. EDGE data is all gatewayed and blocked with some ancient WAP server (epc.tmobile.com), but I can still see some certain sites that they've enabled for their other phones (like CNN.mobi and ESPN.mobi).
I don't think I can switch mine to the Sidekick plan like you're using. Where did you get your SIM?
T-Mobile corporate owned store. Salesperson questioned whether it would work, since I didn't have a Sidekick unique identifier on my phone. Works fine. Unfortunately, port 80 and a few others were blocked back in July, when T-Mobile stopped actively letting unlocked iPhone users buy the Sidekick plan.
If you can't switch to the Sidekick plan through t-mobile.com (under Manage->Plans), I would suggest going to a corporate-owned store and asking, or calling up Customer Care. There are a number of discussion threads on this subject if you Google around, especially involving iPhones. The HowardForums wiki also has some good information, although sometimes out-of-date, incomplete, and ungrammatical.
Be warned, though, I was apparently paying $1/day regardless of whether I used any data or not. All the same, this is the only GSM/unlocked prepaid data plan in America that I'm aware of, and it's still the cheapest. Just have to figure out how to circumvent the blocks.
I've discovered I can switch to the Sidekick plan (cost me a buck to verify that!), but it seems there's no known APN setup that actually works on the iPhone anymore. Most of the forums trying this gave up over the summer, it seems.
I don't think I can switch mine to the Sidekick plan like you're using. Where did you get your SIM?