I switched a few months ago to Vonage, and am saving a ton of money. I have the unlimited $30 plan, so all LD calls are included.
In addition, I make weekly calls to Germany to my family, and the rate is a ridiculously low 3 cents a minute.
By going to cable modem (I had Verizon DSL before), and getting rid of Verizon and MCI as my providers, I am saving every month.
As far as quality and reliability, I have had minimal problems with the quality of calls (no more than regular phone service), and, as long as the cable modem is up, there are no problems. If power goes out, my wife and I have our cell phones.
A couple of points to keep in mind with internet phone service:
1. 911 is not true 911 service. You don't go to a true 911 operator, instead they connect you to a call center, that then calls the approriate party (fire, police, etc). You have to set your location when you set up your account, since you can have any number you want, and they wouldn't be able to tell where you live.
2. There will be some issues. This is still very new technology, so there will be some bugs. I had trouble reaching my voicemail for a couple of days (fixed a while ago), and wasn't able to dial extensions when reaching a general number of a business (happened recently, and was fixed soon after).
3. YMMV: My service works pretty well, but one of my friends had some service issues that were never fully resolved. I believe he switched the AT&T's internet phone service, but I'm not sure how that went.
All in all, I am happy, and, I would recommend it.