Voip (Voice over internet protocol) has been around for a while now, and Skype has some stiff competition.
There is much I could say on this subject, since I have recently converted our home phones to call out over the Internet using a service provided by Voiptalk and in the last 27 days have saved £24.73 against the same calls made on the landline (and £4.19 against Skype). But I fear if I went into the fascinating (for me! ;-)) details, I would loose all but my most loyal readers (those who have still stuck around despite my recent lapse in regular blogging!)
However, I would like to draw your attention, if you use SkypeOut, to one possible alternative, that requires no technical setup, no specialist harware, and runs out-of-the-box with its own software application (just like Skype).
VoipBuster, hails itself as Skype's biggest rival and has its sights set on stealing its customers. And offering international rates as low as 1 euro-cent (~0.7p) a minute; 5 hours of free calls a week to the USA (including mobiles), Portugal, Germany, Spain, Luxemburg, Norway, Austrailia, New Zealand, etc, and unlimited free SMS messages to mobiles in your country... I'm surprised they haven't stolen more!
I have been using this service for the last week and can confirm it works: free means free (though you do have to register and buy some credit with them first, and you stop getting free calls after 4 months if you do not buy any additional credit)