The problem with the cheap phones is they might not be able to be unlocked and they might not use the correct frequencies used for other countries.

What about an ipod touch with internet and then use Google Voice or something? You would just need to be in a place with access to wifi.

And as you mentioned it seems that the best thing to do (or at least the cheapest) is to buy a sim card for the country you are in.

Now I just need an unlocked phone that uses sim cards and has the frequencies for overseas use.

Tony