2010 is rapidly approaching, and in a short few days, people all across the country will be tuning in to watch the ball drop in Times Square. For families that have different members living away from home, 12:01AM is pretty much when the phones start ringing and everyone begins to call everyone else to wish each other a Happy New Year. If you’re calling outside of your local phone area, then these New Year’s, and even other normal domestic or international calls can start to become rather pricey. Skype is a great alternative to allow you to make long distance phone calls for much, much cheaper than normal services – FREE.

I’m somewhat embarrassed to admit that my mom knew about Skype before I did. (I know, I know…I just saw a pig fly by too!) She’s been using it to call her sister who lives overseas. You know how sisters can talk….for hours! So needless to say, when she learned that using Skype, you could make UNLIMITED FREE calls to other Skype users, no matter where they are in the world, it was a no-brainer.

Let’s jump a little bit into Skype and how it works. Skype is a peer-to-peer VoIP (voice over IP) phone service that allows users to make phone calls not just from computer-to-computer, but also from computer-to-landline and even landline-to-computer. They use a proprietary system to manage and encrypt the flow of data (your voice/video) to ensure optimal and secure communication across their network.

To use Skype on your computer, you must have an internet connection and download the software (it’s a free download) from www.skype.com. After downloading the Skype software, run the installation program to get started.

After the installation, you will be prompted to create a Skype account if you don’t have one already. This includes selecting your unique Skype user name, and providing the information that other people can use to find you in the Skype directory.

Once you’ve created your account, the next step is the testing process to make sure that your sound and (optional) video are working. If you have a newer laptop, you probably have a built in microphone and web cam. If you don’t have a microphone or headset, then you can purchase one directly from Skype or you can use a standard headset with microphone.

The Skype software makes it really easy for you go move through all of the steps of the set-up, so that in just a few minutes, you’re ready to  go and start making calls. To make your first call, you’ll need to add a contact. You can do this by using the Skype directory and searching the person using any of their contact information.

Once you’ve added the contact, you can initiate a phone call by clicking on their name in the contact list and hitting the “Call button.” The person you are calling will hear ringing and will receive a little pop-up window and that will ask them if they want to answer or decline the call.

You’ll notice that one of the options to answer the call is to “Answer with video.” If you have a video camera or web cam set up, then you can enable video calling, allowing the person calling you to see you while you’re talking to them. You can also take video snapshots of the person you are watching (or yourself) to send, save, set as profile images, etc.

Once the connection is made, you and the person you are talking to can talk for practically forever – still for FREE. But, if for some reason you get bored with the person you are talking to, you can also decide to conference in someone else! If you conference in another Skype user, the call will still remain free. I decided to test out their computer-to-mobile connection and used my free credit to call one of my friend’s cell phones. When you are conferenced together, everyone can hear everyone else as if you were doing a three-way phone call. Skype allows you to conference in up to 5 people into a conversation.

All Skype to Skype calls are free of charge, but as I’ve mentioned a couple of times, you’re also able to use Skype to call mobile and landlines. To enable this functionality, you need to purchase Skype credits for your account. There are three VERY reasonably priced packages, which are $2.95/month for unlimited US & Canada calls, $5.95/month for unlimited calls to certain countries, and $12.95/month for unlimited calls worldwide (40 countries.) If you’re not ready to commit to a subscription, you can also purchase the pay as you go plan, which has rates starting at $0.021 cents/minute plus a $0.079 connection fee per call. Once you’ve purchased your credits, you can click on the “Call Phones” tab, which will bring up a number pad that you use to dial the landline or cell phone you are trying to dial

Now that I’ve gone over the basics, here are my general thoughts and opinions about Skype. First, the user interface is VERY easy to use. It seems like most things are compatible with the Microsoft Office suite, and lots of the features and functionality look similar to Outlook and MSN. You can even import your contacts directly from Outlook and Yahoo. So, if you’ve used MS, you shouldn’t have any problems with Skype. Even if you haven’t, it’s very easy to figure out how to do. The chat interface is similar to other messaging systems and includes various fun smilies and the ability to play games with each other. Another cool functionality is that you are able to share screens so one person can watch what you’re doing on your computer.

Both the audio and the video quality were very high. There wasn’t any lag in the communication and the video images were clear and without static. If you didn’t know you were on a computer, you wouldn’t be able to tell the difference in sound between Skype and a normal phone. Even when talking to the person on their mobile phone, they said that they heard everything very clearly and without any delay.

Initially, the testers and I thought that Skype would only be useful for people who are on the computer a lot. But once we started thinking about all of the different uses and digging more into the cost structure, it quickly became apparent that Skype would be a cost-savings for pretty much anyone who wants to have a cost-effective phone plan.

Actually, one of my friends, who helped me to test Skype out, has been looking for a new phone solution for his household. His current plan provider hasn’t been able to provide the service or the price he’s been looking for, and other services have been really expensive. After testing out Skype, he’s decided that he’s going to purchase a Skype phone and the Skype Service. His current phone plan costs him ~$100/month ($1200/year.) With Skype, after purchasing a Skype-enabled phone ($169.99), a dedicated Skype online number ($60.00/year), and the unlimited US & Canada subscription ($2.95/month = $36/year) he’ll save $934 for the first year and over $1100 the second year. That’s a 78% and 92% savings over his current plan.

Another thing to consider is that once you have a Skype account, as long as you have your laptop and an internet connection, you can make phone calls wherever you are. For example, if you’re traveling to Paris, instead of paying huge international rates on your cell phone, or even purchasing a calling card, if you have your laptop, you can call someone for free. This makes Skype a great option for anyone who is on-the-go.

Overall, Skype is an extremely cost-effective calling plan (you can’t beat FREE.) The software is easy to use and the connection quality was top notch.

For more information about Skype please visit their website at www.skype.com. Since downloading Skype and using it to call other Skype users is totally FREE, I highly suggest that you download it and test it out for yourself.

WCatDD Skype Giveaway

The Prize:

One winner will receive a FREETALK Skype headset.

To Enter:

Make sure you follow the directions carefully. All giveaway entries should use the ENTRY FORM. You only need to fill out the ENTRY FORM once, unless you decide to additional earn extra entries at a later time. You can earn up to 11 entries into the WCatDD Epsom Salt Giveaway by doing one, some or all of the following:

Ways to Earn Entries:

Make sure you use this ENTRY FORM for your entries to count!

1. THIS ENTRY IS REQUIRED FOR ALL OTHER ENTRIES TO BE VALID (+1): Visit www.skype.com and tell me one thing you like about Skype or tell me how much you would save by switching to Skype.
2. Post this giveaway on your blog (+3)
3. Tweet about this giveaway using the “retweet” link at the top of this post or by tweeting “Free phone calls and video conference with Skype. Enter the @WCatDD Skype Giveaway! http://bit.ly/4sM1ei” (+1)
4. Subscribe to WCatDD (+1)
5. Follow WCatDD on Twitter (+1)
6. Follow us on Google Friend Connect (+1)
7. Follow us using Network Blogs (+1)
8. Add the WCatDD button to Your Site (+2)

The Rules:

One winner will be selected at random for this prize.

Giveaway ends at 11:59 PM EST, January 5, 2010.

Visit our Giveaway Rules page for general giveaway rules that also apply to this giveaway.

Disclaimer: This post consists of my (and/or fellow tester) opinions only. No compensation was given for this review/giveaway. I did receive free FREETALK headsets from the manufacturer or their representing PR agency to use and test for the purposes of this review. This did not affect the outcome of this review.