What does it mean when you unlock your iPhone?

Is it bad? What is it? How do you do it on an iPhone 4S? What exactly does it make happen?

It lets your iPhone work with a carrier besides the one it was originally made to work with.

For instance, an AT&T iPhone originally will only work with AT&T SIM cards. But after you unlock it, it will work with SIM cards from other carriers too, for instance T-Mobile.

It's totally safe to do and doesn't change anything else about the phone the way jailbreaking does.

AT&T is the best place to go to get your iPhone 4s unlocked (if you have an AT&T iPhone of course - if you have Verizon or Sprint instead, you can't unlock it anyway since those carriers don't use SIM cards).