A Locked iPhone is an iPhone that can only be used with the service provider it was intended for. For example, if you buy an iPhone from the US, the iPhone there is locked to AT&T and you CANNOT use any other SimCard other than AT&T.

If you try and use it in Malaysia, you won't get any service. Your iPhone becomes an iPod.

I suggest you buying a factory unlocked phone like the one sold in Malaysia by Maxis/Digi/Celcom. You can use this phone anywhere in the world. You can go to UK, and buy a prepaid card there and use it with your iPhone (This cannot be done with a Locked phone)

For warranty purpose, it is better to buy it from the place where you will be spending a lot of time (i.e. if you work in Malaysia, then buy it in Malaysia). If the phone fails within the warranty period, you can just go to the Maxis/Digi and get it replaced. The iPhone warranty is tied to the service provider and it's not an international warranty like the iPad.

I actually downgraded from a 32GB 3Gs to a 16GB iPhone 4. Found that I had too much junk in my iPhone which I rarely use. Since I can manage what I want to put in or not put in the iPhone via iTunes, I see no need for the extra space. When I had the 3Gs, I put everything on it and was left with 400 MB of free space, when I bought the iPhone 4 and I really looked at what I have in the iPhone, I cut down a lot of junk and I have about 4GB of space left in my 16GB and it has not moved that much.

The latest iOS also have personal home sharing so you don't have to put any movies/music in your phone as you can stream the stuff straight from iTunes ...

Now that Apple US has started selling factory unlocked iPhone 4, I'm not sure how the warranty is going to be like? Will it be under Apple USA warranty etc etc? Maybe they will roll this out internationally and have the same warranty like the iPad which will be really cool.

Lesson learned, never buy an iPhone from those shops, always buy from either Maxis/Celcom/Digi as the warranty for iPhones are exclusive to these 3 carriers only and their authorized service/sale centres.

Then you should be able to get a 1 to 1 exchange from Maxis Centre in KLCC.

I'm sure there is a Maxis service centre in JB. Maybe you can get some service there?

Just make sure it's factory unlocked (preferably units from Digi/Celcom/Maxis) with warranty cards.

Then you know already what you need.