We often get questions regarding "Unlocked" cell phones. We would like take a moment and explain the difference between a "locked" and "unlocked" cell phone.
Generally when speaking of unlocked phones we are talking about a GSM phone. In the USA Cingular (ATT) and T-Mobile are the 2 large GSM carriers. Sprint and Verizon use CDMA phones which usually don't require a SIM card.
First, a locked phone means that it will only work with 1 specific carrier. For example, almost all the phones that you will find at a Cingular/ATT store will only work with a Cingular/ATT SIM card. The same goes for T-Mobile. If you don't plan on switching to another carrier then there really is no need for an unlocked phone.
The main benefit of having an unlocked phone is that you can take any SIM card, from any carrier and put it in your phone. So if sign up for service with ATT and decide to switch to T-Mobile, you can use the phone that you bought from ATT. Another benefit is for international use. While ATT and T-Mobile both offer international plans, they are usually expensive. If your phone is unlocked you can purchase a prepaid SIM in the country you are traveling to for temporary use.
There are many companies online that offer unlocking services at a very reasonable cost (just google phone unlocking). Often the easiest way to get a phone unlocked is to call your carrier's customer service. They can give you the code to unlock your phone.