said by Mike:
You can do that if you want. I'd leave the SIM in. Shouldn't matter.
You don't have to worry about iTunes backups again with a 5 (and technically a 4). Just point backups to iCloud.
Both of these are somewhat incorrect due to open-endedness. (is that a word? lol)
1) Take the SIM out. The SIM holds both your phone number info as well as the possibility of holding contact info (if you copied any to it). Along with that it also provides the SIM number which is linked to your provisioned carrier account. Extra info that doesn't need to be out in public. Take it out, it's unneeded by the next person.
2) iCloud backup cannot hold everything you have, especially if you've only got the free amount and not paying for more. If a person has a ton of stuff on their phone, it will not hold it all. Plus, restoring a really large backup from iCloud takes way longer than with a cable and iTunes.
Everything in the OP's original post is correct.