An unlocked cell phone can be used with any provider, as long as the phone is designed to operate on the frequencies used by the new provider. The two major cellular standards are CDMA and GSM.
There are two major cellular communications standards: Code Division Multiple Access (CDMA) and Global System for Mobile Communications (GSM). CDMA carriers include Sprint and Verizon, while GSM carriers include AT&T and T-Mobile.
Phones that must be used with GSM networks will have a SIM card under the battery. SIM cards are used by GSM networks to identify the phone to the carrier. CDMA phones do not use a SIM card, but have a unique identifier hard-coded from the factory.
Because GSM users can simply change a SIM card to identify their phone with a new network, phones offered by AT&T and T-Mobile are easiest to change between networks. If roaming abroad, you can purchase a local SIM card to avoid high roaming fees.
Many popular cell phones are offered only for a specific type of network. For example, the iPhone is offered only in a GSM model as of early 2010. The Palm Pre and Palm Pixi are offered only for CDMA networks, so even an unlocked Palm model could only be used on select networks.
To get the best price on a phone, you may be required to enter a contract. In this case, an early termination fee would be due if you switch to a new carrier. As a result, it is best to find the right phone with the right carrier the first time.