Unlocked mobile phones???

Right...

Is there any difference between an unlocked mobile phone and a sim locked (to o2) phone???

Is there any software differences at all or doesn't it matter???

thanks i will appreciate any help!!

Yes there is a major difference between locked phone and unlocked phone .

Locked phone :

A phone which is tied with any of the network, it is said to be locked phone . We can't use that phone with other network until you have unlocked it .

Unlocked phone :

A phone which can be compatible with all other GSM sim cards are said to be an unlocked phone . Unlocking can be done by either carrier or by any of the online vendors like UnBBLock.com