What are the benefits & possibilities with an unlocked iPhone?

You will be able to use non AT&T sim cards in your iphone. This will be really useful if you travel abroad as you will be able to swap in a local sim and then save a fortune on call and data.

Here’s a link to a video: 100 reasons to jailbreak your iPhone. Not quite what you’re asking, but it’s somewhat relevant.

As mentioned before, unlocking will allow you to use SIM cards for other networks. For example, you could use it with T-Mobile, but you won’t get 3G due to incompatibilities in the bands that both networks use. This is great if you travel abroad, as you could buy a prepaid card from say, Claro in latin America, or O2 in the U.K. and tap into their network without incurring in roaming charges.

Keep in mind, however, that if you have an iPhone 4 or 4S, the SIM card is a micro-sim, which is smaller than the ones you can normally get out there. You may need to purchase a micro-sim cutter to get them down to the right size.

Thanks! It’s a 3GS

Marked this a “Great Question” but I also wanted to thank you in the thread—this is FANTASTIC news that I hadn’t otherwise heard about, just in time for a trip overseas that I was trying hard to figure out the best phone options for. :)

@marmoset, Nice to know! Thanks!