Activating an unlocked phone

An unlocked phone is a GSM phone that is not tied down to any carrier. This means that in the United States, you can use the phone with either T-Mobile or AT&T, and if you go abroad, you can swap out your SIM card for a foreign one if you so choose. Hooking up an unlocked phone for service is a relatively easy process, even if you don't have a contract already. Your first task is to order and sign up for service either at a store on the carrier's Web site. Of course, carrier reps will ask you if you need a phone, but you don't have to buy one by any means. Just tell the sales representative that you already own a handset. They may ask which model you own, but they shouldn't require that information to provide service. Once you've signed your contract and have your SIM card, just pop it into the phone and start making calls.

There are a couple points to keep in mind, though. In order to browse the Web, you will need to make sure your phone is programmed with the Internet settings unique to either AT&T or T-Mobile. The carrier can give you the settings, but you also can find them on the manufacturer's Web site. And don't listen if the store reps try to dissuade you from using an unlocked phone by telling you it's inherently faulty. That simply isn't true.

Also, if a phone comes free (or nearly free) with your contract, you should think about getting it anyway. It's always a good idea to have another phone around in case your primary handset is lost or stolen.

source:
http://help.cnet.com /Cell_Phones/9602-12576_39-0.html?messageID=2510200&tag=tip-2510200&kw=Cell+Phones&nodeId=6454