Types of VoIP configurations you might see

Computer to computer - FREE

This is the FREE VoIP service and the one most people will come into contact with and use first. Heard of Skype? yes, thought so, this is the technology Skype uses. It's actually been around since the invention of the internet (computer to computer telephony that is) but Skype's popularity is bringing it to the masses with a huge amount of media interest.

With computer to computer telephony both the caller and receiver need to be using the same VoIP service application (Skype, MSN etc), you will typically need a headset or USB phone and you're away. Using this service is FREE and you can phone anyone in the world (not just randomly of course - it's best if it's someone you know!) using the same VoIP service application.

Pros: Free to use, easy to set up, gets you started on VoIP easily

Cons: Both parties need to be running the same 3rd party VoIP software, computer required
 

Computer to phone - $$

Computer to phone is the next step up the ladder and a point at which VoIP telephony service providers start making money. Computer to phone connection is popular among those who make a lot of international calls.  The difference to a normal international landline telephone call is that the per minute charge is usually in pennies rather than tens of pennies or more.

From the viewpoint of the person making the call this service works in much the same way as Computer to Computer in that you make your call via a 3rd party piece of VoIP software using a headset or USB phone. The difference though is that the person you're calling can have a regular landline phone and doesn't need to be connected to the internet or be running a 3rd party piece of VoIP software.

This is achieved by your VoIP telephony service provider connecting your call to the regular landline phone exchange and routing your call to the desired landline number. It's this bit you are paying for.

Pros: Cheap calls to any landline phone in the world, easy to set up

Cons: You still need your computer and VoIP software to use this service, generally can't make emergency services calls.
 

SIP to SIP

SIP is the Voice over IP (VoIP) standard communication protocol. SIP enables two or more people to make phone calls to each other using the Internet to carry the call.

SIP to SIP calls can be made using SIP hardware or SIP software, either way you need an internet connection.

If using SIP software then it pretty much becomes Computer to Computer connections and the same rules apply, this can be extended to use Computer to Phone connections but will cost as shown above.

If using SIP hardware phones then all calls to other SIP hardware phone users are free. This is especially useful for global businesses who can set up each office with SIP phones. Communication anywhere in the world then becomes free with the familiarity of using a phone.

The use of your traditional phone can also be used with the use of a SIP adapter, negating the need to replace handsets.

Pros: SIP is the VoIP communication standard so is likely to be well supported in years to come. Same benefits as Computer to Computer VoIP, can use phone handsets

Cons: SIP phone software / hardware required by both parties if calls to be made free, generally can't make emergency services calls.

Phone to phone

The ultimate VoIP service if VoIP is going to compete with traditional landline calls.

Telephone calls are made using the services of a specialist VoIP service provider. Behaves like a normal phone service.