This varies by country and phone provider. I know for sure in Austria and Germany the costs start at less than $100 for the phone and about $35 in phone calling card value. Domestic rates are not "cheap" from the standpoint that you pay for all local calls (even from landlines). Expect somewhere in the 30-50 cents per minute range. The biggest advantage is that you do NOT have to pay for calls you receive. With the widespread availability of cheap international phone rates from the US (you can call Germany and Austria for less than 10 cents per minute), it can be very convenient.

As for other countries, my experience is that prices will be similar. Having lived in Germany and Austria though, I have direct knowledge of the practices there.