Simply put, if updated via iTunes the phone will be locked. iPhones are unlocked with a software unlock. Full functionality is still there minus the software updates. You can still sync the phone via iTunes (loading/unloading music to the iPod, copying the pictures from the iPhone digital camera, ringtones, audiobooks, videos, movies, tv shows, etc...) Just when it asks to update the actual software you click "NO". (If you lack the ability to make clicking decisions before you read then this device is not for you.)
Either way, most updates are irrelevant here in Belize because we don't use the iPhone here the same way it is used in the States. For example, in the States the iPhone can locate your position and find nearest businesses, get directions, etc...it does this by triangulation which, I'm sure you know, can't be done with technology we have here in Belize.
Most people here just use their iPhone for a cell phone, iPod, text messaging, notebook, audiobook, ebook, email, internet, video, and camera device.
For $1500 it could be yours...I'll even throw in a really really big spoon for your stirring things up!!!!