I recently changed my phone service to Vonage. Vonage provides VOIP and has 2 basic plans for residential customers, 500 minutes for $15/mo or unlimited calling for $25/mo. Since I don't talk on the phone very often, I went with the 500 min package. My “traditional” phone service cost me roughly $45 just for the service (local) and taxes, so I expect to save ~$300/yr with Vonage. If you make a lot of long distance calls, your savings may be even greater.
I received my router/adapter today and installing it was a snap. I just plugged it into my cable modem and then connected my existing router\wireless access point to it and I was up and running. Made a couple of calls and the quality is excellent.
You also get some pretty cool features like e-mail notifications of voice mail, e-mails with the actual voice message attached, web based account management (call forwading, etc). If you travel, you can take your adapter with you and have your phone number with you anywhere you have high speed internet access (save on calls from hotels). You can get a phone number with and area code in a different city or an 800 number.
Vonage has a referral promotion going on, so if you see this an you are interested, I would appreciate you sending me your e-mail address so that I can submit it for the referral credit. You'll get a free month and I'll get two free months if you end up subscribing.