unlocked phones?

Hey everyone. My question is simple but I'm feeling talkative, so I'm going to tell you my whole dilemma. Yesterday I was at the beach with my friends and I had to pee, so I went into the ocean for some public deliverance and quality time with my ecosystem. Post-urination mitigation, I let myself drift back to the shore. Then it hit me: my Sony-Ericsson T610 had been in my pocket the entire time. It was dead, so I removed the SIM card and threw it back into the sea, pitying it like a fish too small for keeps.

I have T-Mobile service, and it's great...except I don't get coverage in my house nor at my school, the two places which need it most. I like my phone, though. It's been a real trooper, surviving 10-story drops, immersion in Gatorade, toilet water, and countless kicks and stomps. The screen lost a lot of its film so there were some areas which weren't displayed, so it was promoted to Gladiator before its passing to a happier place than my pocket.

However, my dad is the typical consumer who allows himself to get roped into long-term contracts, so I'm stuck with T-Mobile for two more months, while my phone is miles away, though making unprecedented discoveries in research of continental shelf sediments. I'm proud, but alone.

So, I've spotted an unlocked Siemens S66 on eBay for $162, ending in about 2 hours. I like the style of this phone, and it seems to have a camera on it that's worth a damn (unlike the T610), upgradable memory, and it looks cool with a slight semblance to my old phone. Now, for my question. What can you do with an unlocked phone, and how? I know that an unlocked phone allows me to use ANY GSM network or provider, but I'm very unfamiliar with that type of feature. Is it legal? Will T-Mobile (and later on) Cingular give me service if they know the phone is unlocked? Is activation of service on the phone any different than a normal phone since it's unlocked? Pretend I'm 5 years old and explain it to me please.

Thanks

question #1. unlocked phone allowed you to use any sim card there is in the world. let say your in canada. all you have to do is buy a prepaid sim card of fido or roger and put it to your phone and your ready 2 go. in this way you can avoid all that very expensive international roaming charges that your service provider offering. if your in t-mo now and you don't like t-mo anymore and all the sudden your thinking about going prepaid. just buy cingular or at&t prepaid sim and your ready to go again. if your in england, just buy o2 or t-mo sim and your ready to call. that is the good about unlock cell phone.
question 2. if you buy the phone unlock let say off ebay i don't think that illegal and after one year when your plan is over the phone is your, you can do all you want to that phone. you can unlock it, break it, throw it, do anything you want! it's yours and you pay for it.
question 3. im not sure if they gonna give you a plan for that. why you wanna do that? sign up first. get the free phone. move your new sim to your unlocked phone. sell that new phone to ebay and your making money. on prepaid all you have to do is tell them that you need a prepaid sim and have unlock cell phone, and they sell you the sim.
question 4. activation of your service is the same even the phone is lock or unlocked. it will work the same.

is there a site i can go to that tells where to find simcard in the phone?

it depend what do you want. if you looking for prepaid sim card. i think ebay is the best. they have t-mo prepaid pre activated sim that all you have to do is put that sim into your phone and your ready to go. and on plan, i think you can check you local cell phone store.

You can buy SIM cards directly from Cingular or TMobile, However I believe this will run you $30-35.

it's more expensive. t-mo charge $25 for the sim and $25 for thr prepaid card. they don't sell just the sim they want you the buy the prepaid card to, and im not sure how much is the activation charges.

Tmob sims are $20.. (postpaid) I have never bought a prepaid one.

as for the legality.. heck.. even T-Mob will unlock your phone after you have had service for 90 days. (something Cingular refused to do for me.. and thus lost a customer)

The activation is $35 AFAIK. BTW if you go to a T-Mobile store they can sell you a SIM Card just by itself. How? Someone carries over a cell phone from Cingular or ATT and they want to keep it, yet they get a free (or not) phone with T-Mobile and the guys at T-mobile will open up the box and get the SIM. Ask them nicely and see what happens i say.

BTW, you switched to T-Mobile because Cingular would not unlock a phone for you? Unlocking a phone at a cell phone place will run you $10-20...hardly a reason to switch...then again hehe if your desperate