Unlocking iPhone4 for Ukraine?

I'm in San Francisco, and my friend in Ukraine wants me to buy an iPhone4 for her when I come visit her in a few weeks. She says it needs to be unlocked, and Craigslist says that unlocked phones are costing $500 to $650 for the 16gb phone. Could someone explain to me the difference between "unlocked" and "jailbroken" iPhones? Would it be easy to buy a phone and unlock it myself? How do I do this?