I've been experimenting with VoIP during the holiday break, as I've got a Verizon line I don't use much, but want to retain the option of having the line. I also travel a fair bit to the UK, and the GSM rates kill if I have to make a lot of calls while there. My wife is originally from Hong Kong, and we also make a lot of calls there, so I've been looking at various choices to lower our telephone costs.
To get slightly technical, Vonage uses an open standard called 'SIP' which is interoperable with a lot of different systems, so you have many choices for doing this.
I have chosen 'sipphone' (http://www.sipphone.com) but there are many other providers, many of them international. You can see a list of them here with rates.
What I like about 'sipphone', instead of Vonage is that you don't have a monthly recurring fee. You buy blocks of minutes to call out to the 'real' world in $10 increments, and they are basically good forever (expire 2 years after your last call). US calls are $0.02/min, Canada $0.035, UK $0.035, Hong Kong $0.05, pretty much a range of 4-6 cents per minute to the 'western' world, Asia, etc. If you call other people who have 'sip' phones, the calls are free. They also do voicemail via email, you can have your phone forward out to various numbers, it's very flexibile. Voice quality is quite good, and the system has been reliable.
If you want an incoming number from the regular telephone network from sipphone, you buy that for $35 per YEAR, or $12 per quarter. What's even cooler, is that you can get a number in various US cities, or a number in the UK. I do some consulting work in the UK, so I'm getting a London number for 2006 to make it easier to be reached from there. I've also got some 617 numbers in Boston.
To use sipphone, you can choose to use either a (free) software solution called 'Gizmo' or buy various hardware solutions.
I started out with the software, on OS X, but have now bought two hardware devices.
One is a hardware router that you plug into your broadband connection, and it has two phone jacks in the back (plus ethernet). You just plug 'regular' phones into this, and you get a dialtone. Buy some minutes and a number and you've got phone lines. The specific hardware I have is from D-Link. (http://www.dlink.com/products/?pid=359) This is sold directly from sipphone for $90 preconfigured to go, (pre-configured adapters) but if you are more technical, I picked one up for $20 on eBay, and flashed the firmware myself to allow me to configure it to this provider.
The other hardware is more interesting. It looks like a slightly large cell phone, but uses WIFI to connect to your account on the sip network. This means anywhere you are that has an open WIFI network, you can make calls.
This device is manufactured by ZyXEL (http://us.zyxel.com/products/model.php?indexcate=1109113163&indexcate1=&indexFlagvalue=1079378556) This costs about $160 online, but I also picked up one for about $100 on eBay and again flashed the hardware. These are also sold set up and locked to a provider (I think there's a Vonage version) but if you do the firmware thing, you can set it up for any provider-- but this is more technical to do.
VoIP is pretty cool. Like that Sprint commercial, I really feel like I'm "Sticking it to the man" when I'm using this stuff.
It's good.