Yes, it allows you to take, for example, a TMobile branded BB and use a cingular sim card and voice/data plan. Or you can travel abroad and use local prepaid sim cards (voice only.) Without unlocking only a TMobile sim sim/plan will work.
Whether or not the carrier will do it depends on the carrier. TMo will do it if your account has been active and in good standing for 90 days. And then you can only do one phone per number every 90 days. Other carriers vary in policy.