What is it?
Most people are familiar w/ NetMeeting and other software that let you talk to others over internet. VOIP is similar. However, it also uses your phone - interface we're all familiar with.
Instead of connecting your phone to wall, you connect it to a box either VOIP company provides or you buy on your own. This is modem. You need highspeed/broadband internet for this. Your modem plugs into your cable/dsl modem and now it can 'talk' btwn your phone and internet.
Your phone lines already do pretty much what VOIP does, just w/ different/older technology (well, some of it's new w/ optics and such, but...).
How hard is it to setup?
It's actually very easy. Assuming you have company send you a modem or you buy a kit at store, you simply plug modem btwn your current cable/dsl modem and your computer (e.g., out from your cable modem now goes to new box and out from that to your computer). It also has a phone jack for your regular phone.
Once it is on, it will boot up and configure itself.
What are benefits?
There are many benefits depending on company you go w/, but here are a few I have (all of these are free w/ monthly fee- $14.99 for my setup):
1. Features like caller id, call waiting, call waiting caller id, call forwarding, etc.
3. Email alerts for new voicemail.
4. Web access to voicemail - you can play your messages on your computer.
5. Auto-forward - if phone is ever down or isn't answered, it's auto-routed to another number
6. Online management of all features, settings, account, etc.
7. Computer dialing - highlight any number on your computer, hit F6 and it sets up call from your phone to theirs - very convinient!
8. Keep your regular phone (you don't need a voip phone)