A former co-worker of mine just started using Vonage at his present employer. He called me last Thursday and asked how well the call sounded.
The quality of the voice transmission was "flat". (Think of a stereo system with the "treble" completely disabled). I asked him if he was calling from a cell phone, but he replied that he was using Vonage. I heard a low level white noise in the background even though the person was in a dead quiet room. The person's voice also experienced drop-offs several times during the course of our conversation.
A current co-worker of mine was working out of his house one evening and was on a conference call with someone who was using Vonage from home. My co-worker said that the quality of the Vonage caller was just plain awful (static, choppy transmission).
My own take on VOIP is that it's a tradeoff. You can realize savings over traditional TDM service, but you are very dependent on your Internet provider and the local power company.
There have been a few examples of people not being able to reach 911 services with VOIP telephone service, resulting in the death of an infant in FL and near deaths of adults in TX.
I've been thinking about trying VOIP, but recent Verizon DSL problems in eastern Massachusetts has me thinking twice about making a change.
I am fairly certain that VOIP will overtake traditional TDM service somewhere down the road. I'll think I'll hold off making a switch until voice quality, better reliability and total E911 coverage has been achieved.