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In your opinion, do they then pay for apps on the App store or use the workaround?

Online payments are not mainstream here. So my friends try to avoid paying for anything as much as possible.

My brother uses an iPod Touch. He has never paid for apps. I know this because he doesn't have a credit card and is still in school. He just uses it to browse the internet and listen to music -- like most people here who has WiFi on their phones.

So do you mean jailbreaking or just unlocking them?

How do they get them if not from the carriers under a 2 year contract? Do they just buy them from Apple at full price?

No. The Apple Stores do not sell them at full price. You must buy one from the carriers. Great isn't it?

The people I know buy their phones from people who come from the US. Most I know people use online forums and meet in person for the payment. Online payments really do not work here in the Philippines (not mainstream).

Also, shipping is expensive here because the Philippines is an archipelago :(