An unlocked phone can run on another network - all that's necessary is taking out the ATT SIM card and inserting one from another mobile network. (A SIM card - Subscriber Information Module - is a little circuit board that contains information about you - your phone number and your mobile network).
Unlocking a phone voids your Apple and your AT&T warranties. If something happens to your iPhone, you're on your own. Apple and ATT won't help you figure it out.
There are at least two ways to unlock your phone - a hardware modification - which means opening up your phone and making some changes to the circuitry. This is technically difficult to do and should only be undertaken by experts. The other way is to run a software program that will do the work for you.
Both programs are easy to download and their operation is self explanatory. But on my iPhone, Ziphone didn't work. It unlocked the iPhone, but I was unable to get YouTube working again and occasionally my iPhone locked up allowing me to make only emergency calls and Ziphone gave me a message telling me to restore it using iTunes.
I wound up restoring the iPhone back to its factory settings (using iTunes) and then running iLibertyX. iLibertyX worked like a charm and within a few minutes the iPhone was unlocked. I put in a SIM card from T-mobile and could make and receive calls, email, and use all the other built-in programs on the iPhone.
Another feature of iLibertyX is that it also "jailbreaks" the iPhone. That means I can download 3rd party programs on to my iPhone. More about that soon.
This article was first published on PDAStreet.com.