It means no SIM lock as in, you aren't locked onto one network. So say if you got a phone from Vodafone or something, your phone will be locked onto Vodafone meaning you can only use a Vodafone SIM card. But, once you unlock a phone, you can use any SIM card for any network around the world (if the phone supports that specific frequency). That's what they mean by unlock.

An unlocked phone can be used with other carriers' sim cards including prepaid sims. A locked phone can only be used with T-Mobile. However, T-Mobile will unlock phones for customers who have been with them for a while.
You can get the unlock code through online..........give your IMEI number and get the unlock code for ur mobile…. i will suggest the website which is doing good service can approach this website.
This site is nearly perfect and they were recommended highly in the cell phone forums. I used them to unlock my cell phone. contacted them and within 30 mins i had my unlock code and my phone was unlocked.
Hope this helps.

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it means that you can use your phone with other gsm carriers.

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Orignal From: What does to unlock a phone (e.g. Nokia or iPhone) mean actually?