To use the phone normally on pay-as-you-go, it should not be unlocked.
The so called 'jailbroken' phones do not work properly with the phones OS, and the regular software updates that offer new functionality to the phone will not work on a jailbroken phone.
There are many disadvantages with a jailbroken phone. The only advantage is you can buy apps that have not been approved for the phone. Many of these apps fail approval because they have poor security or are badly written software, or encourage illegal content.
It is possible to restore with iTunes.
http://www.eff.org/deeplinks/2009/02/apple-say s-jailbreaking-illegal