It is well known that classical states of light exhibit shot noise, characteristic of independent or uncorrelated particles. For phase estimation problems, this leads to a shot-noise limited uncertainty of 1/sqrt[N], where N is the number of particles detected. It is also well known that the shot-noise limit is not fundamental: squeezed states and entangled states can be used for sub-shot-noise phase measurements. The uncertainty principle sets a fundamental limit of 1/N, known as the "Heisenberg" limit. We have recently demonstrated a method, using parametric downconversion and post-selection, to generate entangled "NOON" states suitable for sub-shot-noise phase measurements [M.W. Mitchell et al, Nature 429, 161 (2004)]. We generated a three-photon NOON state and demonstrated three-fold improvement in phase resolution with this state. The relationship between phase resolution and phase uncertainty depends on prior information about the phase being estimated. As in the case of phase measurements with squeezed states, extra precision in one dimension is gained at the cost of reduced precision in other dimensions. Only when prior information is incorporated can entangled-state metrology be applied to beat the shot-noise limit. We illustrate this relationship and discuss adaptive strategies for phase estimation and the possibility of reaching the Heisenberg limit.