In Europe, everyone I know who has a cellphone knows what a SIM is (even grannies), and they know this is the item connecting their phone to their service subscription.
I guess to people from the US this may seem "foreign", but it's really simple and it really works.
Exactly, I was speaking from a US perspective. The historical reason for this is in Europe, interoperability as you travel between countries was a priority, so a single European protocol (GSM) with a removable, interchangeable SIM developed.
In America, competition/free market was the priority so the result was many non-compatible digital protocols (CDMA/TDMA/Nextel/GSM). In the US, if you're switching carriers, you are probably throwing away your phone and getting a new (subsidized) one from your new carrier. Even if you are moving from a GSM to another GSM carrier, because of the subsidies the old SIM is probably locked to your old carrier and it might be cheaper to get a new, subsidized one anyway.
I guess to people from the US this may seem "foreign", but it's really simple and it really works.