I know that apple was only used w/ ATT. but now i guess ppl can unlock the phone and use it w/ T-mobile and other carriers.

Did apple originally make the phone so that only att can carry it? or they knew that it could be modified to use with any carrier?

Iam still confused about this, please advise

they knew and that is why they tried to charge alot to activate

Any phone out there can potentially be unlocked and used on another carrier. Of course they expected it, because it is a phone, and all phones can be unlocked in some way or another at some point in time. Of course they try there hardest to prevent it, people manage to find a way anyways. There will always be a way around things.

But even then, you aren't able to get all the features on the iPhone unless you are with ATT. They gave ATT exclusive rights to use the phone in the United States for a set period of time. And they needed to do this to implement Visual Voice Mail, etc etc.

Now what they have managed to do with the iPhone 3g, is to get the phone, you must have it activated in store. If you don't want to get it activated, you have to pay some outrageous price for it.