If you ever encounter a situation where your iPhone 3G says "No Service" but other phones nearby has, your iPhone is probably in for some trouble. Bad Infineon 3G chipset? Nyahhh!
To remove content, connect iPhone via USB and use iTunes to change the sync settings. Click on iPhone in the Source list, and select each tab to change what content is synced then click apply.
Note: This will reset all settings. No data or media will be deleted.
If that does not resolve your issue, try erasing all content and settings.
Tap Settings > General > Reset > Erase All Contents and Settings
Note: This will delete all media and data. All settings will be reset as well.