GSM, or phones that require SIM cards, are probably by far the the most widely stolen phones in this great country of ours.

Why? do you ask?

Because, it's so simple to unlock the phone and then change the carrier, it can almost make you sick.

With CDMA phones, or phones that don't require a SIM card to work, turn into paper weights once it's called in lost or stolen. It's because the cellular companies that use these phones keep a master "black" list, or a list of all the phones that are reported lost and/or stolen. If someone tries to activate it, they won't be able too. Simple as that.

So what can you do to make your phone useless in the unfortunate even that you loose it, or someone steals it?
Passwords, passwords, passwords!

Password: Phone Lock Code
What is it?
This is a simple enough way to protect your phone. You setup a passcode (usually 4 to 6 numbers, much like the PIN number for your ATM card). Powering the phone off and on will prompt whoever is holding the phone for a password.
What does it do?
Most phones have an option for "Automatic Lock", where after a certain amount of time the phone will lock, and you will need to input the password to use the phone.
Security Level: 2 of 5
While this is a good way to protect your phone, it can also be bypassed pretty easy by loading a new firmware, or knowing the programming codes (which with google, not that hard) and doing a master reset.

Password: SIM Lock
This is a great way to make your phone unusable to anyone but you. If someone puts in a different SIM card than the one that was in it when the password was set, then it will prompt them for a password. No Password, no phone.
What does it do?
It saves information from your SIM card (such as the SIM number) in the phones permanent memory. While that card is in the phone, you won't even know that this security measure is setup.
But when someone tries a different SIM card, even if it is from the same carrier, it will ask for a password every time the phone is powered up. If the user doesn't know the password, they won't be able to do anything with the phone
Security Level: 4.5 of 5
The passcode is saved in the phones permanent memory. Meaning that if the phone is Master Reset (reset back to factory defaults and wiping everything); the firmware is reloaded, anything; the passcode remains in place.
Make sure to set this code to something that you will remember, but hard enough for anyone not to be able to figure out.
If your SIM card ever becomes damaged and requires changing SIM cards, if you loose this password, then the phone is done for.
Sure, you can ship the phone into the manufacturer to have the code removed, but this requires a lot of paperwork (proof of purchase, proof of ownership, etc)

Password: Changing Default Codes
Most default passcodes are something stupid like 0000, 1234, etc. Changing the default passcode(s) to something that only you will know will help lock down your phone.
What does it do?
Most phones require these passcodes to be able to Master Reset (exception are Sony Ericsson phones, most don't need this code).
Security Level: 2.5 of 5

Remember, make sure to change or setup passcodes that you will remember. It can be a real pain to be stuck not remembering the code when you really need too!

See More: How to secure your SIM based phone.