Skype is great for long distance calls. You can lease an inbound phone number for about $4 per month (it's 10 Euros for three months), and anyone with a normal telephone can call that number like a normal line. I have a Seattle number, so my friends and family in Seattle can call me in Japan for free to them. Inbound calls to me are covered by the $4 a month. Outbound calls worldwide (to standard phone lines) are about 2 cents per minute, although a few developing nations cost more.
The only downside is that it drops calls now and then, so for business, it's still not quite there. But for keeping in touch, it's great. My total international phone bill is around $10 a month.
SNG