I've tried Skype several times as a phone replacement but it never works well enough. Maybe it's just this way in the UK. Every time I've tried using it to call abroad (i.e. Germany where I have relatives), they can't hear me due to it crackling or there's a really long delay. Even when I've used it in the UK to call landlines, there's always a noticeable delay and calls feel really disconnected and uncomfortable. I've tried it with the microphone in my webcam and speakers, I've tried it with a headset and I even tried it with a USB adapter for connecting a regular phone. I've tried purchasing higher tier Skype services such as a Skype-In number but still I've always been disappointed with the service. It isn't due to my ADSL line either, I connect at 12 MBps down and 1.3 MBps up and don't have any problems with any other service.
I've been using skype from its early v1.0 betas, I remember them having new releases and features every few weeks or so with cool new stuff, even been a first adopted of their paid services.. but ever since that ebay acquisition they just went completely wrong ways. SLOW development, useless features, never even bothered upgrading to v4.
So here's hoping that the old innovative guys at skype finally get back to doing what they know and straightening things out!
The original move by eBay (buying Skype in 2005) wasn't really smart in hindsight. However, eBay has managed to sell it back for roughly the same amount they had paid back in 2005 ($2.75 billion vs.$2.6 billion), which is an excellent move considering that at this point Skype is worth much less than that for eBay.
Besides, the timing is just right: remember that Google has just bought Gizmo5 and is probably planning to join Google Voice + Gizmo, which will become a serious competitor to Skype.