I've had Skype for almost a year now. My dad talked me into getting it so we could talk more often without using so many cell phone minutes (he has a cheaper package than I do for the cell).

My dad lives 500 miles away and we can talk as long as we want to, and yes it is free. He hooks up the web cam and headset and I tend to usually just type in the 'chat' feature like you would on IM but I can see and hear him and he doesn't type well. lol