First off, the Prison, if you are put behind bars, can you use an item like the Cloak of Feathers or Magic Carpet to teleport away? Or also lets say somehow you completed the Warlock's quest inside the Prison, would you be able to teleport out? Also Can you use teleportation items in the inner region to get to the Crown of Command without a talisman? Or only up to the entrance to the Crown of Command space? Can you teleport at all in the Inner region?

The key to understand teleportation effects is to check for specific instructions. The current FAQ 1.1 explains this well enough:

Movement Effects
Some cards, effects, and even certain Regions modify or replace a character’s movement. Most of the Spells and special abilities that characters use to modify their movement feature one of the following phrases:

• “Instead of rolling the die for movement”
• “Instead of moving normally”

Instead of Rolling the Die for Movement
In order for a character to use a movement effect with the phrase “instead of rolling the die for movement,” the character must be able to roll a die following the normal rules for movement. If the character cannot roll a die following the normal rules, the character cannot use the movement effect.

Example: A character has the Poltergeist Follower which slows his movement to 1 space per turn. The character cannot cast the Teleport Spell, which has the wording “instead of rolling the die for movement,” because he automatically moves 1 space instead of rolling the die for movement.

Instead of Moving Normally
As long as a character is able to move, even under special conditions, he may use a movement effect with the wording “instead of moving normally.”

Example: The Cloak of Feathers states “Instead of moving normally, you may discard the Cloak of Feathers to teleport to any space in the same Region.” A character in the Inner Region may use the Cloak of Feathers to move to the Crown of Command because the Cloak of Feathers has the wording “instead of moving normally.”

If a character cannot move or must test to see if he is able to move (such being Enslaved at the Temple, for example), he cannot use any movement effects. Note that characters on the Crown of Command do not move and therefore cannot use any movement effects.

Applying this to your case, in Jail you don't move but must roll the die as instructed by the space, so no movement effects can be used. Probably the Warlock Quest would work, but you have to explain me how can you complete a Quest that you were not able to complete before being thrown in Jail. Remember that Warlock Quests must be completed as soon as you meet the required conditions.

The quoted FAQ gives enough instructions about teleporting in the Inner Region.

Usually in Talisman you move first and then have an encounter on your new space. Some effects cause you to skip your movement and encounter the current space. The Jail space in The City expansion is one such example (pg. 10 of The City manual).

If you skip your movement, then you cannot use movement effects. The question is what constitutes a movement effect. Is it something your character uses to move during the movement step of his turn? Or is it any effect that causes your character to move from one space to another, even when it is not your turn?

In my opinion, although I don't think there is a clear answer, a "movement effect" refers specifically to the movement step of your turn. So, a completed Warlock Quest done while in Jail ( e.g. the "Lose 1 Life" quest) or someone using the Transference Spell could move you out of Jail.

Regarding teleporting in the Inner Region, you can. You just can't target creatures with spells or evade them in the Inner Region. Remember, though - you don't roll a die for movement in the Inner Region, So, any effect that says, "Instead of rolling a die for movement" would not be allowed, but those effects that say, "Instead of moving normally," or "At the start of your turn," or "at any time," etc., would be allowed.

If you skip your movement, then you cannot use movement effects. The question is what constitutes a movement effect. Is it something your character uses to move during the movement step of his turn? Or is it any effect that causes your character to move from one space to another, even when it is not your turn?

In my opinion, although I don't think there is a clear answer, a "movement effect" refers specifically to the movement step of your turn. So, a completed Warlock Quest done while in Jail ( e.g. the "Lose 1 Life" quest) or someone using the Transference Spell could move you out of Jail.

I think that the Rules Clarifications I quoted in blue help you understand any scenario. However, "movement" has been defined as a turn step in the following fashion (Rulebook page 9):

Movement – The player rolls a die and moves his character that number of spaces around the board.

This is the basic definition of the game action and the FAQ clarifications are built on this stepping stone. The idea that you can use the Cloak of Feathers on a "movement" that's not the movement step is weird, not only if this happens during another player's turn. Maybe you're exaggerating your uncertainties here.

There is a possibility to cast Path of Destiny spell when you are in Jail and draw e.g. " Lose one Life " quest or cast a Transference spell when other character is in the City.
But on the other side from City rules:

"Characters cannot use effects or special abilities to move out of the Jail;characters can only escape by following the instructions on the Jail space."
Although it is not clearly stated about spells/quests the second sentence would encourage the interpretation that he can not take advantage of these opportunities, and will be teleported to the Warlock's cave after leaving the Jail.
The more expansions and cards the more an individual rule will be in conflict and this is unfortunately inevitable...

I think we agree, but I wasn't too clear.

Of course there are many ways to move during the "movement step," the default way being rolling 1 die. My point is that if a character is prohibited from "moving," he is prohibited from taking the "movement step" in any form, but may still be moved by other effects such as spells played on him.

So I believe, although I am open to correction, that Transference or a completed Warlock Quest could move someone out of Jail.

Cloak of Feathers would be played in lieu of the normal movement step.