These plans work just like a regular land-line telephone. The only difference is that you're using the Internet as your connection. You must have a high-speed Internet connection (DSL/cable/other broadband) to make and receive the calls. And you'll need a couple extra devices like an adapter or router that plugs into your home network. It sounds a lot harder than it is. Each of the sites below offers great instructions on how to get connected!
Check out these cheap VoiP options
Ooma.com - A one-time purchase of around $200 give you lifetime phone service with no monthly bills ever again. Of course, "lifetime" means the lifetime of the company, not your lifetime!
Packet8.net - Cost: Residential plans range from $14.99-$24.99 per month. Includes unlimited long distance and local calling, caller ID, voicemail and call forwarding.
Vonage.com - Unlimited local and long distance calling within the U.S. and Canada, call waiting, voicemail, call forwarding, repeat dialing, call transfer, caller ID, caller ID Block.
iConnectHere.com - With this company, you can talk over the computer with or without a telephone. To talk directly through the PC, just hook your headset or telephone jack into the computer. Plan rates vary so check the website for details. Includes unlimited long distance, voicemail, caller ID and all of the other extras.
Skype.com - Free calls over the internet to other people for as long as you like, to wherever you like. Free to download. Skype has recently partnered with Verizon to let customers use a $30/month data plan to make unlimited calls.