Make Your iPod Touch Into a VoIP Phone Without Jailbreaking!

"The latest iPhone and iPod touch are nearly identical devices, ignoring the pesky reality that the latter isn't a phone. We can fix that. Here's how to turn your iPod touch into a viable (and cheaper) iPhone alternative out of the box."

Looking for a way to reduce your mobile phone bills? Without jailbreaking, it is easy to turn your iPod Touch (and a headset) into a VoIP phone, assuming that you have a WiFi connection when needed. Skype (free if using skype-to-skype) and Line2 (formerly available mainly to jailbreakers, free app, $10/month cost) are good options, as is Fring. All provide good connections with a good WiFi signal. And, of course, SIP apps work as well.

Downsides? Skyping works well within Skype (skype-to-skype), but if you want (or need) a real phone number, it's not free. Line2 is a solid app, but needs to be running in the background, otherwise calls go to voice mail. A $10 monthly fee includes unlimited calling in the US and Canada, and is quite reasonably when compared to carrier post-paid costs.

No WiFi or in a car? You'll need a cellular data plan (and hardware) like Verizon's MiFi or Sprint's Overdrive: a small box that provides an instant hot-spot for about $60 per month for 5GB of data. Coverage is good, but this is a good alternative only if you make a lot of mobile calls (and of course use the cellular data). 

Real World results? In a test while cruising the LA freeway system using a MiFi box, VoIP call quality was better than native iPhone calls, lag was more noticeable, dropped calls were about the same, but dropped much less gracefully than native iPhone calls. Overall, pretty equivalent. A downside here: yet another gadget to carry around, and the MiFi battery doesn't have a very long life. Don't forget the power cord.

The article also mentions Siphon SIP/VoIP for jailbroken iPod Touches. Similar to Fring, but better iOS integration.

I can see this technology being invaluable for international travel, to avoid those $120 phone calls.