Will it work if its unlocked? does it need to be jailbroken as well? whats the difference between the two? 
somebody told me the NTC sim card doesn't fit in the slot, is that true?
can anybody suggest any other decent unlocked smartphone to take to Nepal and where to buy?
Thank you.

If unlocked will work. Sim can be cut to the size needed fir iphone and you can get that done wherever you get the sim. I used ncell with no problems.

 Take it to New York Pipalbot, they will unlock it for 500 rupees.