I am living in France and Switzerland, so I cannot speak for Europe as a whole. But I did not hear about any Iphone not working in Europe so far.
My feeling is that we have much more freedom in Europe regarding mobile phone service provider than in America. As long as your phone is not sim locked, you should be fine. :)
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Merci, j'ai habité à Paris cet été. Je voudrais retourner.
Aaaaaand that is about the extent of my French that I am willing to type right now. OK, I'm vaguely familiar with what an unlocked SIM is. I'll have to look more into that.