The radio does not support AT&T's 3G frequencies. If you are fine with GPRS/EDGE, you could already be using it on AT&T.

You've always been able to. The nexus one was never _carrier_ locked. (But as mentioned, the different frequency that ATT uses for 3G is unsupported -- so just voice and EDGE data.)

This "unlock" is, as described, attaining root level permissions on the phone, thus the ability to do things in software that the stock firmware disallows.