Afriend of mine just got an iOS 5, and was unable to unlock it. He told me that he found out it was blacklisted. I had never heard that an individual phone could be blacklisted. Can anyone explain how that would happen?

IMEIs can be blacklisted for multiple reasons. Primarily it is done due to theft of the device, though there are other reasons it can be done as well. The only way to remove an IMEI block is to contact the carrier that listed it on the blacklist and determine the reasoning for it. If the device is stolen, there is no way to remove the IMEI blacklist. I would find out where he got the phone from -- if it was from ebay or craigslist, it's likely that the phone is a lost or stolen phone and will not be able to connect to a cellular network due to the blacklist.

Before any additional discussion happens, I want to point out that the discussion of changing IMEI numbers is not permitted on the forum as the act of doing so is illegal in just about every country, so if it comes to that point, unfortunately we will not be able to help and do not allow discussions on that topic.