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Galaxy Note works perfectly well without a SIM card. In such scenario it behaves more or less like an Android tablet without 3G.
If you need to update the firmware, you can always do it via Odin (software for PC) or Mobile Odin (directly from your phone), you don't have to rely on Samsung update. There are several forums (search for xda developers), which will give you detailed information how to update your Galaxy Note using official Samsung firmware or even alternative firmwares without relying on Samsung updater.
In fact, for some people official Samsung update channels (through KIES or OTA) just don't work, even though they haven't modified their phones in any way, so updating via third party software is the only option. "Mobile Odin" is rather foolproof, i.e. if you download the official Samsung firmware, put it on an SD card and run Mobile Odin, it will do the job with minimum fuss. The PC version is a bit more complicated and I wouldn't advertise it for people who don't have some expertise with manually updating firmwares.
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