Yes, you can use an old Pantech Impact on the $25 monthly plan. You could use it on any plan if you'd like, if you wanted to switch or something.
You'll need to obtain a prepaid GoPhone SIM card. You can either get one from an AT&T store (the cost is about $25, although it has been said that they will waive the cost of the SIM if you add money to your new account in-store) or from online retainers such as eBay. eBay SIMs work great and are very cheap to purchase.
Once you have a SIM, it needs to be activated. You can then add money to your account and begin using your phone. If you purchase a SIM online, you will have to activate it yourself (it's a simple process). If you go to an AT&T store, they will likely activate it for you and you can add money at that time as well.