An "Unregistered SIM" error means that the cellular service for the phone does not recognize the phone being used. SIM stands for subscriber identity module and is a small plastic card that is inserted into the phone that identifies the device to the cellular network.
Contacting the cellular service is the fastest way to correct the error, as the problem could be that the system hasn't been updated to accept the SIM card's information as valid. The error can occur frequently with accounts that have just been activated, as the carrier's system may not immediately register the change that validates the SIM card in question. Cellphones that use prepaid cards, or pay-as-you-go systems, can also show the "Unregistered SIM" error to reflect an expired account.