Internet phone

Internet phones, or IP phones, use packet-switched VoIP, or Internet telephony, to transmit telephone calls over the Internet as opposed to the circuit-switched telephony used by the traditional Public Switched Telephone Network (PSTN). The advantage to Internet phone calls is that unlike regular long-distance calls, online phone calls are free -- there's no fees beyond the cost of your Internet access.

Also referred to as online phones, an Internet phone can be a physical telephone with built-in IP technology and an RJ-45 Ethernet connector instead of the RJ-11 phone connector found in standard phones, or it can be a voice-capable computer that uses VoIP hardware such as MagicJack or software like Skype. This flexibility makes it possible for IP phone calls to function as Internet phone-to-phone, Internet phone-to-PC, PC-to-PC or PC-to-phone calls.

See The Difference Between VoIP and PSTN Systems in the Did You Know... ? section of Webopedia.
Also see the VoIP Meets Wi-Fi article in the Did You Know? section of Webopedia.

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