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Skype is only free, computer to computer or if one of their computer phones are used, otherwise there is a minimum fee for computer to a regular phone, depending on the country called. We use it all of the time overseas.
The biggest downside that I see to Skype is the peer-to-peer network. They can use your computer as a router for the Skype network. If you have a fast machine with a fat pipe connection that stays up 24/7 your a prime candidate.
I use SunRocket for long distance but still have a POTS line for local calls.
I have used it to call my brother and some of the Admin and Moderators on this site. Works pretty good. I have gotten dropped once or twice and it is sometimes staticy (sp?). Works well though.
I bought a $14 card and it has lasted me over 150 minutes. Still have about 9 or 10 bucks left.