it is possible, but not with the iphone itself. What i did was to sync my old cell phone via bluetooth with my mac, it transfered all my contacts to de adress book in the mac, then i plugged the iphone and voilá, it syncs my contacts too.
My phone was a Motorola Razr. I copied all the numbers from the sim to the phone memory. Then using iSync I added the phone and synced. This brought the phones into Address Book. Then I moved the sim to the iphone, and synced with the iphone. I had to set the info settings in iTunes to sync the contacts. Hope this helped.