Ever wonder how sad it is to hold limited access in your newly bought iPhone. File system limitations in iPhone standards suck. You would not be able to access system files at all and the worst part is you cannot use the disk directly as you could do with an iPod with disk mode enabled.
In order to comfort you, Jail breaking & unlocking iPhone helps you break the access restrictions. You can Jailbreak iPhone 4 easily. The entire iPhone file system would be open for use once you are done with it. Similarly Unlock refers to the process of breaking the network limitations.
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