A Subscriber Identity Module (SIM) card is a tiny removable chip that fits into the back of your phone that allows phones to be instantly activated, interchanged, swapped out and upgraded, all without carrier intervention. The SIM itself is tied to the network, rather than the actual phone. Phones that are card-enabled can be used with any GSM carrier. CDMA carriers do not use SIM cards. They require proprietary handsets that are linked to one carrier only.
By purchasing a SIM card with minutes and a local number in the country you are visiting, you can make calls against the card to save yourself international roaming charges from your carrier back home.