help with changing contract phone needed

[NWhiteley]

I bought a Vodafone Sony Ericson K750i on a 18 month contract, about 3 months ago, nice phone.... but, unfortunately i bought almost blind, just a 2 minute play with a friends phone. It was ordered online from the Vodafone web site, so here is the problem.. i have very fat stumpy fingers, and im forever pressing the wrong keys whilst dialing out and accessing the menus. it has come to the point where it has to go. After speaking to Vodafone, i am now aware that i can only upgrade in the last 2 months of the contract, so i will have to buy a new phone and swap things over. so....

1. is it just a matter of buying an unlocked phone (sharp 903) and putting my current sim card in to it?

2. will i need to inform Vodafone of the change?

3. how do i go about unlocking my K750i so that i can sell it?