How to unlock/reset/jailbreak an iPhone 4?

A family member sold me his iPhone 4 (unsure which model, although the software appears updated) because he got the new 5, but he failed to tell me that the phone was still locked. I don't know how to get in contact with him to figure it out, and therefore can't do the online reset I've been told about.
Is there any other way to reset, unlock, or "jailbreak" the phone so that I can actually use it, or am I pretty well screwed?

You just need to get the phone factory unlocked and you can use it on your carrier. If you need help with getting the phone unlocked, mail me for references.

Did you mean that your iPhone is locked with your network? If yes, you need to unlock your iPhone from network lock by using Remote unlocking service. It doesn't requires jailbreaking. You can get it from any of the online vendors like SimpleUnlocking.com. No need to reset your iPhone 4.