Wow, can't believe nobody mentioned SIPPHONE for the iPhone, it's in the Apple store.

I just came back from three weeks in south america and wanted a way to be able to call home affordable (ie: free, if possible). I gave all the current VOIP and SIP type applications I could find a pretty serious testing, including all the ones mentioned on here.

All of the testing was done on a 1st generation iPhone, using wifi.

The only two winners were SIPPHONE, which is super simple, but effective. If you have an existing SIP account for your VOIP service, you just put in your information and it works. Real simple, voice quality was good.

Truphone was the solution if you want a pay-as-you-go solution. The per minute to the US was cheap and the voice quality was really good. I'm not sure what codec they are using, but it survived low-bandwidth wifi connections pretty well.

Both of these apps are available in the iTunes store. The SIPPhone application was around $6. The Truphone one is free, since you have to pay as you go.

I found the iPhone an excellent companion for this sort of use. In some wifi locations you have to first load up a web page and "Agree" to the terms and conditions before you get service. Using some of the current wifi VOIP phones on the market like the Linksys, this is a serious pain to do even simple web page navigation.

The Amazon Kindle application came out during the trip, so I downloaded that and some books. If you have the iPhone in flight mode, you can read on that thing forever without running out of battery.

As a portable SIP phone for VOIP and the Kindle app, the iPhone is definitely staying in my bag for international travel. Don't even need to get the 3G model for this use.