We've got a Magic Jack, and have had it for a year. We just renewed our year subscription.
Honestly, it's great for our situation. It's incredibly cheap, and with my family living two states away the unlimited long distance is very good!
There are a few downsides. One, you have to have your phone connected to a computer which has to be on and connected to the internet for the phone to work. This means if your internet or power goes out, you have no landline. Still, we have a cellphone, so that doesn't usually hurt us too much.
If you have an unstable internet connection or are not comfortable with leaving your PC on all day, Magic Jack may not be for you - but we have had no problems with it.