I should remind everyone that unlocking is NOT illegal, and a phone os locked by a company to force them to use their service.
When a phone is locked a company pays for the purchase of the phone, and sells it out to you. This can be done at a discount, or a Profit. Locking a phone is done for a loss, bu they get profit back from you being in the contract for 2 years. ANYWAY, the phone ios locked so it will only work with a spcific service (cingular, At&t etc..)
By unlocking a phone it can be used with any service provider. This rule is not absolute though.. Some services require your phone to have a simcard slot, thus an unlocked phone without a simcard slot could not be used.
Unlocking a new phone can cost between 10-$30 by a local shop or someone with the tools. Use google, but get a professional to do it.