Hello 'andrewpianoman',
A phone that is "blacklisted" is one that has been added to a network or database by a wireless provider, usually because it has been reported stolen.
Blacklisted phones cannot then be re-added to any carrier, at least not one who participates in the program. That's why these phones tend to be sold "for parts".
If you are looking at a phone and wondering whether it is going to be operational or not, you might try this verification link:
http://www.protectyourdata.ca/check-the-status-of-your-device-in-canada/
If a seller insists the phone is fine but will not provide the buyer with this number, a buyer may be well advised to find a different seller. There are lots of phone sellers on ebay.
Hope that helps. 