VoIP stands for Voice over Internet Protocol. It's simply a means of sending voice over the Internet via a broadband connection, or an internal network. It uses the same cable standards used to connect your computers. In much the same way as an MP3 player digitizes music, VoIP does the same for voice. Once converted, it's simply data that can be transmitted around the world, literally!
Because it's based on the Internet, VoIP is incredibly reliable, so much so that BT (British Telecom) is in the process of converting all of their exchanges to the same technology. Buying a legacy phone system using landlines today is like buying an analog TV set just before the whole country goes digital. Yes, it will work with various adapters, but you're missing out on many of the new features.
The big monopolistic telephone companies have been around for a hundred years now, and in that time, the way phones are used hasn't changed much. Why should these companies innovate when they can simply sit back and rake in the money? Much the same goes for the traditional phone supplier. They've been quite happy selling line rentals for years and making a margin on every line rental that's installed.
But all that is changing and the phone companies know it. It is not uncommon to hear of seven-year line rental contracts! While these seem to save the customer money, the real reason these packages are being sold is to lock the customer in, so that when that same customer realizes he can have 10+ calls on one broadband line, there's nothing they can do about it. Do you really know where your business will be in two years, never mind seven?