There are different concepts of disposable cell phones. The phone is often an unlocked phone usable with almost any carrier, but not necessarily. The instrument has very limited functionality: you can talk, and you can text. It might not have a display of any kind. It might come with minutes, or you may need to contact a prepaid carrier to purchase minutes. But the main idea is that the phone is ready to go, or just about; requires no contract or any kind of sign-up; and is cheap enough that you're comfortable tossing it after using it for just one vacation or even just one hour of talk. Some companies offer a small refund on phones returned for recycling.
Because there is no record of a purchaser, disposable phones are suspect tools of terrorists, recent news articles state.