MagicJack as alternative to Skype?

I came across MagicJack a few weeks ago. Looked really interesting. You buy a small gadget for $40 bucks, and pay $20 bucks in year 2 and after, and you can make all the domestic phone calls you want. It is supposed to be dead-simple to setup; plug-n-play. It's an interesting marketing trick to say that all of your calls are "free." Fact is that you are subscribing to a service. So the calls are not free. But, wow, they are cheap.

First thing I thought about was what the impact would be to Skype. Now MagicJack seems to be making some real news. Not sure if they can make money at $20 a year... and not sure of the service quality. Will be interesting to see how they do, and who will acquire them. Using MagicJack? Let me know how it is working for you.