Lordy. Sheldon Brown must be turning in his grave. Never heard of a threaded fork? Gotta be a joke, right?
And what is with this disposable mindset that people have -- why is the first impulse just to trash a component and replace it instead of trying to repair it? It's not rocket science. (It's brain surgery.)
Anyway, to the OP -- you probably don't need a new headset unless your races are pitted/rusted.
Even if the bearings are shot, if the races are still in okay shape, you can just replace the bearings. For an older threaded headset, we're probably talking about loose BB's in retainers, not pressed-in sealed cartridge bearings. Replacing them is very easy.
First thing to check is the bearing retainers, which are the metal "cages" that the BB's are held in. You may have bent one or both, which would seize the headset.
Take the whole headset apart and clean/degrease the bearings and the races.
Look at the bearing retainers on both the top and bottom bearings. If one or both are bent or crushed, you may be able to replace the bearings with new ones in new retainers, but it can be kind of tough to find the right ones to fit.
It's easier to just discard the retainer bearings and repack the headset with loose BB's and copious grease. Just be sure to use the right diameter BB's, and to pack them so that there is about 1 bb's worth of open space remaining in the race, but no more. You don't want to pack the race solid with BB's, there has to be a little space so the bearings can spread out and distribute the load. Your shop can measure the BB's if you're not sure.
However, with loose BB's, you'll need to keep an eye on it to ensure it doesn't come loose. Just check it before every ride and make sure it's adjusted correctly. And I wouldn't recommend doing this if the bike is going to be abused off-road. But it works great for headsets on recreational and commuter bikes, I've done it many times. My old Stumpy (now a cruiser) is set up this way using a first-generation Aheadset, and has been since 1997 with no problems.
But before you waste time repacking the headset, check the bearing races for obvious pitting or grooving. One good way to tell is to take a ballpoint pen and run it around the inside of the race.
If it rolls smoothly, you're good to go with the rebuild. If it feels rough or snags in pits, the race is shot and you need a new headset.
There's a fine line between salvageable and toast, and it's a judgement call. If you don't need absolutely perfect performance, a little pitting/grooving may be okay, and can be compensated for with extra grease and frequent maintenance - it's not ideal, but not a deal breaker either, depending. But if there's enough damage to impede the free movement of the bearings, the headset is toast.
Any good shop should be able to rebuild your headset for you with new bearings. There is no need to replace the headset unless you're absolutely sure it's toast. If it ain't broke, don't replace it, rebuild it. There's no reason to cast a serviceable headset into the landfill if it can be rebuilt. That's a waste of both resources and money, because for a fraction of the cost of a new headset and a shop install, you can rebuild it yourself. Seriously, new BB's will probably cost you under $10, if that. And definitely don't let them sell you on a threadless headset, because that will require a new fork, too.
But before you do any of the above, are you certain you didn't just loosen the lockring and not the top race? Loosening the lockring won't free the bearings if the race remains too tight, because the race is the part that actually compresses the bearings.
Here's what you do. Snug the lockring down against the spacers with your fingers -- not a wrench. Then, hold the lockring in place with a headset wrench, and then take a second headset wrench and back the threaded race off (turn it lefty-loosey) to decompress the bearings.
Resist the urge to tighten the lockring at the same time - just hold it in place, and back the threaded race off as far as you can (you are actually tightening it against the spacers and lockring, so it will only turn so much) and see if that frees the bearings.
If not, back the lockring out a bit and repeat the same procedure until the fork turns freely. (Incidentally, this is the same basic concept involved in adjusting cup-and-cone hubs…
Once the bearings are free and the fork is turning again, then check to make sure that the bearings have adequate compression to keep the fork from slopping in the head tube.
To do that, stand next to the bike and hold the front brake. Push the bike forward and back with the brake engaged, and grab the bike where the fork crown butts against the head tube. If there's any movement between the fork and the frame, try tightening the headset a bit more (tighten the threaded race a bit, tighten the lockring, then back the race out as described above). Work in small increments until you find that balance between "too tight" and "too loose."
If you can't find that balance, or if you find that balance but it comes loose again quickly, you need to open the headset up and see what's going on inside.
And as usual, you can find just about everything else you need to know on the subject at:
http://www.sheldonbrown.com/headsets.html#overhaul