[bhz1]

The owner probably reported it lost and when it went to activate in Itunes it shut you down. When my oldest bought his 3G I took his old 2G since it seemed a bit better and more stable than min (he had the newer bootloader) I restored and unlocked it and just popped my sim in. I had no issues whatsoever with itunes. After I bought my own 3G iPhone, I gave the 2G to my youngest son. I restored it and repwned it. i wanted to make it legit because I know he'll use data After i put his sim in and plugged it into itunes it asked me to set up the account and all. It could be that if your found phone was reported lost, iTunes will not activate it. You will have to unlock and activate as though you were on a different carrier.

Not to pass judgement here, but did you ever try and find its owner? I once found a razr while out walking the dog and thought to look in the phone contacts for an entry like "home", or some kind of reference to a relative. but it was just random names listed. I even called Cingular (this was a while ago) and told them i found the phone to which they told me they couldnt give me any info on its owner to contact them and it was already reported lost. I ended up unlocking it and using it as a spare.