The quality of the sound is generally quite good. The faster the connection, the better the sound. If you're using the video option, it's choppy even with a fast link. Making calls are simple and reliable. And the software gives you a number of great options, like call forwarding to a cell phone.
My son was in Norway for 4 months and we only used Skype. Most of the time you could not tell the difference between Skype and a land line/cell phone.
Skype in is an option in which you purchase a local phone number for one year. In my case, I dialed this local number and it connected to my son. Saved my a bundle in not having to place international calls.
Skypeout is simply the term in which you call landlines or cell phones. You pay by the minute.