This will work on your iPod touch, iPhone and iPad. You will be able to make/receive free phone calls over WiFi or 3G. Call quality is decent. It's generally at least as good as AT&T, but sometimes worse depending on your internet connection.
Step One:
Get a Google Voice account. It's free. If you haven't gotten one yet, here's the big shiny reason you've been waiting for.
http://voice.google.com. I'll see you in a couple hours after you pick your idea phone number. (mine's 50-88-CJW)
Step Two:
Download and install
TALKATONE from the app store. It's free. You don't need the $2 a month add on subscription either. The only setting I've changed is to set the compression to none, forcing the connection to go directly through Google servers. This seems to be smart, in my trials thus far. I'm not sure compressing and redirecting data is a great idea.
That's it. Now, you have an extra phone. For free.
Why would you want to do this?
1. You can use your iPad as a speaker phone for when you have to call a public utility.
2. Google Voice has call recording. Just press 4 at any time to start it. I haven't used this much, but it will make a debt collector hang up immediately, so it's worthwhile for that alone.
3. You can give your google voice number to anyone you want. Call blocking is built in, so if someone becomes a real prick, you can just cut them off. Also, you can set calls to go straight to Voicemail if it's a stranger or after hours.
4. When you go on vacation (even internationally) you can still make/get free phone calls. As long as you've got internet, it should work.
I use my Google Voice number for everything. This frees me to keep my cell number as private as I want to.
It's possible to have multiple GV numbers set up with Talkatone, but it's going to cost you $2 a month or $20 a year for their subscription.