1) You usually have to choose between a selection of models, depending on the carrier. One of the better prepaid carriers is Virgin Mobile (they use the Sprint network), but you only have a handful of phones to choose from. Also, the actual phone device is usually more expensive when you choose a pay-as-you-go plan vs. contract.
2) Carrier will keep track of minutes (incoming/outgoing).
3) Convenience stores (like 7-11) at one time sold pre-paid phones w/ a 'starter' card (like $20) that you can activate immediately. I usually saw ATTWS phones. Since ATTWS is now Cingular, I assume that the convenience stores have Cingular (or some other carrier that they're pushing these days). However, I'd guess that like everything else in a convenience store, you're probably paying a bit more for the device, etc.
Otherwise, if you get a phone/plan from Virgin Mobile or another carrier, you usually get it as quickly as it takes FedEx to get to your door.
Bush background check: actually, there is less checking when you go the pre-paid route as compared to contract. Often, no credit check is involved (Verizon, etc, last time I saw their ads for prepaid).
4) I've often heard Virgin Mobile recommended in terms of value (despite the fact that there's no contract, all prepaid plans require that you purchase/use x minutes/month or x minutes/90 days -- and you don't get a credit for unused minutes). Generally speaking, you can expect to pay quite a bit by minute if you use the phone a lot.
5) I don't know what a disposable cell phone is. Pay-as-you-go plans are the 'no contract' plans. They are disposable in the sense that if you no longer want to use it, you are done -- no commitment.
To use VM as an example -- you are required to spend $20/90days. You start burning up your $20 payment when you use the phone. See:
http://www.virginmobileusa.com/new2vm/how.dofor how the metered rate works. If your usage is low, then your monthly payment is essentially $6.67 and you can quit anytime.
There are other prepaid plans -- you'll have to sit down and project your anticipated usage vs the metered rates and the mandatory amt you must use over time to see which plan actually works for you. Then you have to look at quality issues -- what network is being used, etc.
6) OK, I've been in the country. I happened to watch a completely unfunny sitcom on CBS about a package delivery guy and his wife. I thought -- "oh, this thing will get cancelled in no time." I was shocked to see multiple seasons already on DVD at Amazon. I really don't understand what's happened either -- and I've been here.
7) the rebate thing is usually associated w/ phones that you activate w/ a service contract. Yes, it sucks, and in fact, I am waiting for a rebate on my phone which is now overdue. I'm not holding my breath.
With prepaid/no contract arrangements, you usually don't get any rebates and pay a few bucks for the phone. The exception is when a reseller offers a rebate but you have to be careful -- the fine terms of the reseller agreement usually have some draconian terms written in. In other words, the wireless reseller is acting as an agent between you and the service you plan to use. The incentive to enter this complicated arrangement, instead of signing up direct is usually a rebate. However, you have to check the terms and conditions carefully with both the service provider (carrier) *and* the reseller.