VoIP

VoIP (Voice over Internet Protocol) are also called Internet Telephony. The definition of Internet Telephony maybe as, A category of hardware and software that enables people to use the Internet as the transmission medium for telephone calls. For users who have free, or fixed-price Internet access, Internet telephony software essentially provides free telephone calls anywhere in the world. To date, however, Internet telephony does not offer the same quality of telephone service as direct telephone connections.
Internet Telephony is transport of telephone calls over the Internet, no matter whether traditional telephony devices, multimedia PCs or dedicated terminals take part in the calls, and no matter whether the calls are entirely or partially transmitted over the Internet.

How it Works?
Internet Telephony is based on packet switching, where the connection is shared instead of using a dedicated one as in PSTN. When a voice is sent via the data network, the voice is first digitalized and placed into packets. This technique requires an application on the sender's site to digitalize the voice into a digital signal. On the receiver's side, this digitalized signal needs to be converted back to an analog signal so it can be played back to the receiver.
History
If you have an ear open to new computer technologies, you are sure to have heard about VoIP. Voice over Internet Protocol (VoIP) is an emerging set of applications which allows you to make telephone calls over the Internet. It is already starting to replace existing telephone networks, with some people and businesses opting to cancel their traditional phone line and use VoIP instead. VoIP was originally developed to provide voice communication between computer users in different locations. Although it still has this application, it has been further developed into a telephone network in its own right. People using VoIP can call any telephone anywhere in the world and can receive calls on telephone sets connected to the Internet or Local Area Network (LAN).
Background: It all started back in 1995 when Israeli computer enthusiasts made the first computer to computer voice connection. In the same year this technology was developed into a software package called Internet Phone Software. All that was needed to talk to another computer user was a modem, sound card, speakers, and a microphone. The software digitized and compressed the audio signal before sending it over the Internet in data packets. These voice connections could only occur between computers which had the software installed. The sound quality was very poor -- nowhere near the quality of standard telephone connections. The technology continued to be developed and by 1998 gateways had been established to allow PC-to-phone connections. Later that same year phone-to-phone connections that used the Internet for voice transmission were set in place. These phone-to-phone connections still required a computer to initiate the call, but once the connection was established, the callers could use a regular phone set.
Why are we going for VOIP?
VoIP, or Voice over Internet Protocol, is rapidly becoming a top choice for people wishing to avoid costly telephone service. Why? The system works by allowing you to make phone calls using a computer network, such as your Internet provider. The way it works is similar to email; most providers offer unlimited long-distance calling for a low monthly fee or for a low per-minute rate. Where long-distance fees can run high very quickly through traditional phone providers, Voice over IP can provide the same types of calls for a much lower rate. VoIP is the calling choice of the future, and providers are already scrambling to provide the best service for the best price. For the consumer, this is great news. As companies compete for business, rates and service options continue to improve. Why will you love VoIP? The following are three top reasons. Huge Savings Imagine being able to keep your current phone number and make as many long distance calls as you wish (within a certain area) for one low price. No more fluctuating phone bills, outrageous long distance charges, or other surcharges that repeatedly shows up on your bill. Voice over IP offers just that. Just as email changed how people communicate, so too will VoIP. Depending on the provider you choose, you may be able to combine your Internet service with your phone service into one lower monthly bill. As VoIP becomes more common, it will be available in more areas. However, even for those who are not yet able to change their local number to Voice over IP, there is still the option of switching your long distance. This requires a phone number outside of your area code, but the savings will be well worth it. Further, if you make many phone calls to a particular area code, choose a number from that area and your contacts will be able to call you as if it were a local call. Not a bad way to go while you are waiting for local service! Options Voice over IP comes with many options, including both the ones you are used to as well as some new ones. Imagine checking your phone calls through your computer while you are traveling, or having an email sent to you every time you have a new voice mail message! The technologies that integrate your computer and your phone service are opening up a whole new playing field in communications. VoIP combined with your computer, mobile phone, and other gadgets will keep you more connected than ever. Of course, if you choose not to be connected, that is possible as well. Many Voice over IP providers include features you are used to, such as caller ID, call waiting, and call forwarding. You may also have the option to block callers, use an "away" message, or "do not disturb" options. Additional features may include three-way calling (again avoiding costly charges), speed dialing, distinctive rings, and many other options. Moreover, if you don't want to give up some of the benefits to which you've become accustomed, many providers offer directory assistance (for a fee, although this could change) and the ability to access 911 emergency personnel, which is a concern for many people.
It's Not Going Anywhere VoIP is the future of calling. As the technology evolves, more and more integration options will come available. Depending on the use, you may be ready to switch over now and enjoy the cost savings. For home users, switching to Voice over IP can be a very cost-saving option, particularly for those who make many long-distance calls. Home-based businesses may also benefit from switching. Larger business may do well to wait a bit, or start integrating the technology on a smaller scale. As VoIP evolves, so too will options for larger businesses. When making the switch to VoIP, do a bit of research to choose the best option. Avoid getting locked-into a long-term contract, as new providers are competing with existing ones, and you'll want to take advantage of better rates and services if the come along.
For Beginners:
For those who have never heard about the potential of VoIP, be prepared to radically change the way you think about your current long-distance calling plan. VoIP (Voice over Internet Protocol) is very simply, a method for taking ordinary analog audio signals and turning them into digital signals that can be sent over the Internet. So what? Well, for those of you who are already paying a monthly fee for an Internet connection, this means that you can use that same connection to place free long distance phone calls. This process works by using already available VoIP software to make phone calls over the Internet, essentially circumventing phone companies and their service charges. Interestingly, VoIP is not an entirely new thing. In fact, a number of providing companies have been around for some time. But it has only been with the more recent explosion of high-speed internet access usage, that VoIP has gotten any attention. Now the major telephone carriers are setting up their own VoIP calling plans throughout, another testament to the potential of the technology.
Advantages:
While your current long-distance plan covers you for only one location, say calls made from your office, with VoIP, you can make a call anywhere that you can get a broadband connection. That is because all three methods above, unlike analog calls, send the call information via the Internet. This means you can make calls from home, on vacation, on business trips, and almost anywhere else. Anywhere you go, with VoIP you can bring your home phone along with you. In the same way, computer-to-computer connections mean that as long as you have your laptop and a connection, you are ready to go. There are also some nifty benefits to having your calls transmitted over the Internet. For example, some VoIP service providers allow you to check your voicemail via your e-mail, while others allow you to attach voice messages to your e-mails.
Future of VoIP
While most analysts believe it will be at least a decade before companies and telephone providers make the full switch to VoIP, the potential for the technology's use today is already quite astounding. A report by the Forrester Research Group predicts that by the end of 2006, nearly 5 million U.S. households will be using VoIP phone service. With the savings and flexibility that the technology already offers, and new advances just ahead on the horizon, we can expect those numbers will only increase in the future.
Cheapest And Best Software Available (in my opinion):
Internet Calls are the cheapest in the market for computer to computer VoIP over broadband connection. They provide 10 seconds trial period. And once you buy credit after registering in their site, you can call free for over 45 destination countries for free (120 days from your registration date) and whats more is you can send cheap International SMS also.