This is a quick and practical guide to getting your iPhone ready to travel overseas without huge fees. Also a guide to great apps to use once you're there.
This summer I visited my wife's family in Italy. It was an amazing trip with tons of food, family, and visiting famous locations.
The sleeper champ of the trip was my iPhone: I did not expect it to be as useful as it ended up being. Before traveling I was determined to not let my technology detract from my experience, because sometimes in the States I tend to get more focused on whats going on on the interwebs than what is happening around me. You know what I mean, it's very easy to do.
What surprised me was how much we needed my phone on the trip, thus I was inspired to write this article. I will try to break down these tips so that it is easy for the nerds and the not-so-nerds alike to understand and implement.
The first part of this post will deal with getting your phone activated to work in whatever country you are going, while the second part will go over some handy apps.
Part 1: Activation
Step 1: Call your local carrier (AT&T, Verizon, or Sprint for US) and ask them to unlock your phone for use with another carrier overseas.
What this does is allow you to get out from underneath the heavy fees the US carriers will charge you in order to use THEIR affiliates overseas.
If money is not an issue for you, it is fine to use the built in international options your carrier offers but it will cost an arm and a leg. When my sister travelled overseas to Peru last year, Verizon charged around $100 for a small data package with minutes. Ouch.
If you are a budget traveller, definitely call your carrier to unlock it for an international carrier. YOU MUST HAVE A SIM CARD SLOT FOR THIS TO WORK. This means that all iPhones will work except the iPhone 4 CDMA (Verizon and Sprint). The iPhone 3GS, iPhone 4 (AT&T), iPhone 4S, and iPhone 5 have SIM card slots regardless if you have CDMA (Verizon/Sprint) or GSM (AT&T, T-Mobile).
Before arriving to your destination, do a little googling to see which carriers have good coverage for where you are travelling. A five minute search revealed that TIM and 3 were the two best carriers for most of Italy, and they both offered a pre-paid card around the same price.
Step 2: Buy a Prepaid SIM once you arrive
A cell carrier stand should be pretty easy to find once you arrive, as they are scattered all over most airports. I found mine at a little TIM store in Florence and purchased a pre-paid SIM with 500 minutes, 500 texts, and 2GB of data for 30€ (around $40 US). I know this may be steep for some, but it was the best 30€ I spent on the trip.
Slap the SIM card in your iPhone and you're ready to go. Some iPhone models require iTunes for activation, but I believe it is only for iOS 5 and below. All three iPhones we carried were running iOS 6 and activated just fine over the cellular network.
Step 3: Use your iPhone
Now that you are activated, your iPhone will act the exact same as it does in the States, the only difference being the carrier logo in the top left corner of the screen. The carrier I chose, TIM, had great customer service and had instructions in English once I called the number they provided. 
Part 2: Apps
Google Translate - Free
By far the app that enhanced my trip more than any other app. With the Google Translate app and a solid data connection, I was able to carry on entire conversations in Italian. This is on top of the studying I have been doing with Rosetta Stone and a little help from my wife (who is fluent in Italian), but still, this app is amazing.
Word Lens - $4.99 per language
Probably the most 'magical' app in this group is Word Lens by Quest Visual. This app has received a lot of press so I won't go into too much detail, but basically it uses the iPhone's camera to translate signs into English on the fly. It absolutely functions as advertised, and really impressed everyone I demoed it for.
Geocaching - $9.99
If you are not familiar with Geocaching, head over to their Geocaching 101 page and get ready for your world to change. Basically, Geocaching turns the entire world into a giant treasure map. Visiting boring places suddenly becomes an exciting scavenger hunt. In Italy, there are tons of ruins, abandoned castles, and buildings that are 1000 years old: Geocaching felt like Nicolas Cage in National Treasure. And who doesn't want to be Nic Cage?!
Wikihood - Free
Update April 9th, 2014: Wikihood is no longer available in the App Store. Sadly, the developers shut down the service as of January 16th, 2014.
Wikihood almost eliminates the need for a tour guide. This app pulls Wikipedia articles using your GPS location. For example, while in Siena I pulled up articles on the Torre di Mangia and everyone in our group learned something new, including my Italian family.
Apple Maps / Google Maps - Free
While everyone complains about the Apple Maps.app, it was incredibly handy and reliable in Italy (2). Several times my father-in-law got turned around, so I whipped out Apple Maps and had us back on track within a few minutes. I recommend Apple maps for navigation if you have the address already; it is not great at finding POIs (points of interest).
Google Maps is an equally great solution, and had significantly more POIs than Apple, but was still not an effective means of finding restaurants or famous landmarks. In my experience, Foursquare was much better at this.
Foursquare & TripAdvisor - Free
A lot of my friends hate Foursquare, but it was great for finding restaurants and gelato places with good reviews. There were so many tourist trap restaurants that served sub-par, touristy food, making Foursquare essential to the mix. Foursquare had by far the most POIs and reliable locate data with solid reviews from real users.
Tripadvisor is another solid choice for finding great restaurants. I did not use it much because I prefer Foursquare, but my father-in-law is a restaurant owner in Florence and told me that TripAdvisor in Italy. To confirm this, I noticed that most tour guide companies pleaded with patrons to leave good TripAdvisor reviews.
Skype - free
Skype saved us an entire day of headache and the cost of a hotel room. On the way to Italy, our flight from Munich to Florence was cancelled due to plane maintenance and Lufthansa sent all 200-something people to the customer service desk to get rebooked for a new flight. There was no way we were going to get on the next flight, which Was in about two hours, if I would have waited in line.
So I had the idea to call Lufthansa customer service on the phone and try to book that way. I purchased a day of Wi-Fi for about $6 in the airport and Skype-called (with credit previously purchased) the customer service line: I was booked in 5 minutes. I still had to wait in line to get my boarding passes printed, but when I got up to the counter, the rep was dumbfounded at how I was able to get on-board that flight: almost no one else made it, and she told me they closed it up about 15 minutes after the cancellation notice. The next flight was the next day and we would have had to pay for a hotel in Munich. Needless to say, I LOVE TECHNOLOGY.
ConvertBot - $1.99
ConvertBot was essential for converting those pesky kilometers to miles and Celcius to Farenheit.
The basic iPhone camera is the best camera app for any type of person, from beginners to photographers. This one is a no-brainer. I did not take another camera besides my iPhone 5 and was able to get some great shots. Check out my Instagram for some examples.
In another testament to the cellular network run by TIM, I also used my phone to FaceTime my family back home while driving down the superstrada (the interstate). We were driving to a little town named Courmayer in the mountains and I thought heck, I'll try to FaceTime my fam. Not only did it connect immediately, it held a solid connection without interruption for 10 minutes. I was impressed.
Advanced Tip: VPN Service - $10
Even though we travelled a good bit, we had several hours of downtime every night. My wife made the suggestion of watching Netflix on certain nights so she, her sister, and her sister's friend could catch up on Pretty Little Liars and One Tree Hill (no comment). Netflix is US only, but a little Google research told me I could subscribe to a VPN service which would mask the location of your IP address to be in America. This would open up access to all US-only streaming sites like Netflix and Hulu plus on the nights we had nothing to do and no family over.
The service I chose was HideMyAss (funny name, amazing service), which charged me around $10 for a non-renewing month of VPN access.
WARNING: this is fairly complicated to set up and I wouldn't recommend it if you are not techy or don't know what you are doing. You could easily mess up your internet connection. HMA has great instructional websites, however, and if you follow them to the "t" you will be fine. We had the luxury of Wi-Fi in the home we stayed, which a lot of hotels or hostels would not. Only choose this option if you know you are going to have reliable internet.
Because I purchased a (relatively) cheap pre-paid SIM card, I was able to use my iPhone in Italy to better communicate with my Italian family, eat better food, see more sights, learn more history, and keep up with the folks back home. If you are traveling overseas, DO IT. You will not regret it.
: Nerd fact: the cell networks in Europe are actually much better than ours. They have less area to cover, and they all use GSM, which is superior technology to CDMA like Verizon and Sprint use. On their 3G I got around 10Mbps down and 5 up in the city and about 3Mbps down and 1 up in the country. They only had LTE in a few cities and I never got a chance to use it.
2: Apple maps has been reliable for me in the US as well. I cannot speak for any other countries besides the US.