What is VOIP?

First off, I popped over to Wikipedia for the answer to your question of what VOIP and Internet Telephony is all about. They have a great explanation:

"Analog telephony is also referred as A circuit switched telephony, it is one where a dedicated connection (circuit or channel) must be set up between two nodes before they may communicate. For the duration of the communication, that connection may only be used by the same two nodes, and when the communication has ceased, the connection must be explicitly cancelled.

"In later years it became possible to multiplex multiple connections over the same physical conductor, but nonetheless each channel on the multiplexed link was dedicated to one call at a time. Circuit switching can be relatively inefficient because capacity is wasted on connections which are set up but (however momentarily) not in use.

"Digital telephony, also known as VoIP, or IP Telephony, uses packet switching, it is the communications paradigm in which packets (units of information carriage) are individually routed between nodes over data links which might be shared by many other nodes. This contrasts with the principal other paradigm, circuit switching, which sets up a dedicated connection between the two nodes for their exclusive use for the duration of the communication. Packet switching is used to optimize the use of the bandwidth available in a network, to minimize the transmission latency (i.e. the time it takes for data to pass across the network), and to increase robustness of communication."

I do have a couple of different VOIP systems I work with. Most notably, I have a Skype account which works very well when I'm using my computer-based headset system, but I haven't yet been able to get it to route into a traditional telephone device.

The second VOIP account I have is with Vbuzzer, and it's terrific - a little box that plugs directly into my router via Ethernet and my existing telephone via a regular phone cord, and suddenly I have unlimited US and Canadian calls for $10/month. Can't complain about that!

One of the most interesting features of a VOIP system is that you can be area code independent too: I could just as easily have my inbound Vbuzzer phone number be in the 212 area code to pretend I'm in New York, the 818 area code for Los Angeles, 604 for Vancouver, or just about any other area code in the United States or Canada.

Anyway, I hope this helps answer your own question. Try it, these systems really make you reexamine your reliance on the traditional phone infrastructure.