Go easy on me, I have nearly no clue what's going down.

I posted this in the "T-Mobile" section, but I'm not sure if it was better off here.

Long story short I'm looking into purchasing a phone and an iPhone or Touch. I've got to use the iPhone a few times and I got to spend an afternoon exploring the Touch, I like what I see. Logically I'd go for the iPhone because it combines everything I could possibly want into one package. Well, that's all well and good, but the thing is I can't manage to shell out $60.00+ a month for features I won't use.

At the moment I have about $600.00 to work with and an old T-Mobile phone w/ SIM card, which is identical to the phone my younger brother is using now. Bear with me I've never owned a phone, but currently he is purchasing these minutes on a card that are activated via numerical input into the phone. (I know, I probably sound like an idiot right about now.)

I've spent hours and hours searching for an answer, but in essence my objective is to have an iPhone act as a glorified Touch w/ basic calling, possibly texting. WiFi connectivity is enough for me, so I don't mind not having satellite connectivity.

I'm more than ready to shell out my time modding, hacking, and jailbreaking (?) the phone. What I'd really like at this point is some options and opinions on how I could get this done.

Also, if anyone could explain what exactly is "Jailbreaking" in respect to modding, "Edge", and Pre-Paid vs Pay as you Go that would be awesome.

Any help would be phenomenal.