How do you transfer contacts from iphone to sim card?

As of version 3.0 of the iphone OS there is an option under Settings -> Mail, Contacts, Calendars -> Import SIM Contacts.

Obviously you need the sim card in the iphone to allow this to happen

Also be aware that if your iphone is locked to a carrier, it will not let you import contacts from a different carrier's SIM card. (tested on iphone 4, iOS 4.1)