I know nothing about unlocking
1)I have seen some shops offer this service,is it illgit?
2)Will I lose all my pictures on my phone?
3)If it's unlocked does this mean I can just buy a monthly or pay as you go sim?
1. Unlocking is completely legal (you are just removing the SIM locks so a phone can be used on any network)
Unblocking is illegal (changing IMEI numbers so that phones that have been reported lost/missing/stolen will work again)
2. It depends on the phone, some just need a code entering, others need the entire software on the phone changing.
3. If it's unlocked (and not blocked by the networks) then you can use any other SIM, although THREE SIM cards don't always work as some need a different voltage, and only work in 3G phones not 2G ones.
Hope this helps.