The Law As the Schoolmaster

Dispensationalists who teach that Old Testament law has been completely cancelled out by Christ, quote Galatians 3:23-25 as proof for their claim: "Before this faith came, we were held prisoners by the law, locked up until faith should be revealed. So the law was put in charge to lead us to Christ that we might be justified by faith. Now that faith has come, we are no longer under the supervision of the law." (The last phrase in the New King James Version translates as "we are no longer under a tutor.")
In order to fully understand this passage we need to answer two questions.

1. What does Paul mean by the term "law"? and
2. What does he mean when he says "we are no longer under a tutor"?