
Skype for iPhone is available in the US iTunes store, free of charge. The reports from users in Japan who have had access to this application have been great even though there where initially some glitches. It is not clear weather the initial problems where a glitch in software or a network problem but it is still worth a try for free. The requirements seem to be access to 3G (not over WiFI as long as you are running OS 3.0 beta). Click here for the app store to try it for yourself.
This seems like it is in direct competition with the AT&T voice plan. Good thing for AT&T you can't get the data plan without the voice plan, right?
There have been reports of problems with JailBroken iPhones (no surprise there) and a few momentary issues with non jail broken phones; however, they seemed to go away with further testing according to Engadget.
Upon further investigation, Engadget reports that the Skype application only works with the 3.0 beta OS and then sometimes drops the audio altogether and often crashes. The non-beta software seems to work better but only works over WiFi. In this mode call quality is reported to be "surprisingly good". We can only hope that the 3G version of the software catches up soon. In any event it sounds promising.