It seems pretty common, that if you spoke with 10 Verizon CSR's, you're likely to get 10 different answers
If you can, go into your nearest Verizon Wireless store. I was just at one near my job in Manhattan (of course mine doesn't come from Apple until tomorrow but my friend was buying accessories for his). Anyway, the guy in the store said you can activate in store or on the phone, because you have to accept terms and conditions (I've never seen this before, guess this is new for the iPhone). I don't know about an automated activation though like for Blackberries. Like as others in this thread have said, call back and you'll hopefully get someone more intelligent.
Received my iphone today at lunch and I had no problems during activation.
To help Jdragione out, did you get it activate it on the line that you upgraded, or were you looking to activated it on a different line? Did you call a rep to activate? Did the rep work for Apple or Verizon?