A bit more practical information.
Your phone operates/transmits at a multitude of frequencies. They can broadly be classified as cellular (including Edge, 3G/4G and whatnot), bluetooth and wifi. When you switch your phone to airplane mode, by default all three will be switched off. However, even in airplane mode you can then go back in and switch BT and Wifi back on. Cellular will always be deactivated. Receive-only frequencies, including GPS, can always be activated if an app requests it, regardless of whether you have airplane mode switched on or not.
The distraction of incoming messages/calls, and the interference issues have been covered already. But I want to add something about functionality. When you actually use your phone in-flight, it may be beneficial to have some of these categories on. For instance, some pilots may have removable equipment such as a portable AHRS, a remote GPS receiver or some sort of PCAS/TCAS to enhance the capabilities of the phone, or to enhance the reception of the GPS signal. These devices may communicate with your phone over BT or Wifi, so that will need to be enabled in that case. And obviously you have to be running the right software. SkyDemon comes to mind. As an aside, I have never seen any interference with aircraft systems from a BT or Wifi signal. Cellular, yes, but BT and Wifi not.
Similarly, programs such as SkyDemon can be configured to make use of a cellular connection in-flight, to download the latest weather, NOTAMs and various other bits of useful information that may change while in-flight. Obviously for this to work you will need a cellular connection to be active. Whether you want that or not, then becomes a captains decision between interference/distraction on the one hand, and usefulness on the other hand. Furthermore, you will most likely find that above a certain altitude, cellular signals are simply not working: For efficiency purposes cellphone towers only transmit the signals in a more or less horizontal disc, and not up into the sky.