Reste iPhone including Activation with ATT

[honeybrain]

I am trying to sell my iPhone which i am using presently with ATT. Would like to buy new 3GS. But not sure, how to deactivate the phone service. In settings/Reset i see an option to reset All Settings, Would that work

Yesterday, i restored to 3.0. It looks brand new anyways. But would like deactivate my phone service as well. Otherwise i can't sell this baby and buy a new one and activate.

Any help is appreciated

[BarcaMagic]

Just put it in DFU mode and restore in itunes , take your sim out and ship it out .

[honeybrain]

How to go into DFU Mode, before restoring, do i need to take out sim or later?

DFU mode would take care of not activating the phone ?

It's a local drop, so can i use the phone till i handover, before that remove SIM and give it to the buyer?