I've been using voice over internet protocol (VoIP) for a while now. What it means is that I don't use my phone line to talk to people.
So how do I dial my friends? I have cable internet, and I bought a little box (a Linksys 3102) for $AUD65. My normal phone connects to the box, as does an ethernet cable from my router. A picture would be better, but it's actually pretty simple.
Tonight I rang my partner who is on holidays in New Zealand (I'm meant to be there too, but work interfered). I spoke to her for 18 minutes, and it cost me $AUD0.45. Yes, less than half a dollar, and the quality was that of a normal phone line. If I'd been on a different plan with my VoIP provider it would have cost AUD0.08. Really.
There are a bunch of providers who can do this for you. I use www.pennytel.com, but you can use a number of others, including www.skype.com. All I know is that my call costs have dropped from $50 per month to $7.