What's all this about 'unlocked', 'GSM', 'quad-band', 'SIM-less', etc?
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> What, exactly, do "unlocked" and "simless" mean?  I've deliberately
> stayed very innocent of the details of cell phones, but now that
> there's one that's actually free (mostly, or entirely?), I'm more
> interested.
>
> [...] isn't it the case that carriers have restrictions on what
> sorts of devices they will allow you to hook up to their networks?
> That is, the fact that it's simless doesn't mean that I can connect
> it to Verizon, does it?

With SIM cards (used on all GSM-network phones == AT&T, T-Mobile), the
information that the carrier uses to connect a phone to a specific
account number is encoded in the SIM card.  (As are your phone
numbers, optionally.)

"Unlocked" means that a GSM phone will allow a SIM card from any
carrier to be used.  All phones sold in company stores these days are
"locked", meaning that the phone will refuse to work with a SIM card
from another carrier.  Unlocking can be easier or harder depending on
the phone: most Nokias can be unlocked by downloading a calculator
program and inputting the IMEI.  Never pay to unlock a Nokia.

Upshot: with GSM phones, you can move your SIM card between different
phones and it will still talk to the same account on the same
carrier. Alternatively, you can substitute SIM cards and talk to a
different carrier.  This is common for people who travel a lot, since
carriers often rape you for roaming charges in (say) Europe.  They'll
buy a pay-by-the-minute SIM card from the local country while
traveling.

Note, however, that there are four GSM frequency bands, and several
data frequency bands, and not all phones operate on all bands.  This
can cause problems when moving a phone designed for AT&T to T-Mobile
or back: many current phones have all four voice bands now
("quad-band"), but older phones especially will not, meaning that you
won't get coverage if the local tower uses a band your phone doesn't
have.  Also, data networks can differ.  This is why you can't get
high-speed data transfer when using an unlocked G1 on AT&T.

There can also be issues with unlocked/unofficient phones not working
with proprietary carrier features like locked-in app stores, etc.

In contrast, CDMA phones (Verizon, Sprint) do not have a removable SIM
card: all the information is encoded in the phone itself.  Thus you
cannot play such tricks.  If you want to use a different phone, you
have to call the phone company and have it added to your account.

In practice, most people don't care about this.  The reason you do is
if you are buying a used phone, or a phone that isn't available direct
from the carrier.  (This is particularly common for GSM phones, which
are standard in Europe, and there are many, many nice phones that
don't come to the USA or do so in crippled form.)  In that case, you
need to make sure it's unlocked and works on all the frequency bands
your carrier uses.