My friend gave me her old Palm Pre, can I buy phone cards for this or do I have to set up a plan?

The Palm Pre you got will be compatible only with service provider your friend got the phone from. If it was Virgin Mobile, you can use it on Virgin Mobile pre-paid network. Otherwise, it won't work with any prepaid service.

Well it depends. The Palm Pre uses a SIM card. Does your current phone have a SIM card? If so, you may be able to remove the SIM card from your existing phone and put it in the Palm, then you could just keep buying the cards. If your current phone has no SIM card you'd need to go to Wal*Mart or some place that sells phones and buy a prepaid cell phone that uses SIM cards (like AT&T GoPhone). Then once the AT&T phone is activated, remove the SIM card and put it in the Palm.

Here's the kicker though, since the Palm is a smartphone, it's going to be using a lot of data. Make sure you keep an eye on your usage or it will use up all of your balance without you even knowing it.