How can I use internet on my phone with GPRS when my sim is actually GSM and the two are different technologies.
Your SIM card have nothing to do with technology used for data transfer. SIM only contains identification of subscriber (Subscriber identity module) and maybe some auth/encryption process (A3/A5), thus it's on modem, if is capable with GPRS/EDGE/HSDPA (and of course operator's network)
Only thing to note is the "phase" of your SIM card. However, it's only information, with which extension is your SIM capable.
You can read ETSI TS 131 102 or ETSI TS 121 111 documents for some details, there are available on http://www.etsi.org