In many countries it is becoming illegal to use a phone whilst driving. Unfortunatly in most it is perfectly legal to use a hands free device whilst driving despite the fact that it has the same discration issues.
In Isreal, Japan, Portugal and Signapore it is illgeal to use a mobile phone whilst driving, be it hands-free or not.
It is illegal to use a hand held phone while driving in: Argentina, australia, Austria, Bahrain, Belgium, Brazil, Bulgaria, Canada (not all provinces), Chile, China, Colombia, Croatia, Cyprus, Czech Republic, Denmark, Egypt, Ethiopia, Finland, Estonia, France, Germany, Greece, Hong Kong, Hungary, India (only in Andhra Pradesh, Chennai, New Delhi, Kerala and Mumbai), Iran (only in Tehran), Ireland, Isle of Man, Israel, Italy, Jersey, Jordan, Kenya, Kuwait, Lithuania, Malaysia, Mexico (only in Mexico City), Morocco, Netherlands, New Zealand, Norway, Oman, Pakistan (only in Islamabad), Philippines, Poland, Portugal, Romania, Russia, Saudi Arabia, Serbia, Signapore, Slovakia, Slovenia, South Africa, South Korea, Spain, Sri Lanka, Switerzerland, Taiwan, Thailand, Trinidad and Tobago, Turkey, Turkmenistan, Ukraine, United Arab Emirates, United Kingdom, USA (only in a few states), Zimbabwe and Zambia.
This list is up to date as of 06/2011.