I have been a longtime user of SKYPE and we even use it for our ebay business.    I just recently tried MAGICJACK and I am sending it back after just one day.   Let me say right from the outside, that I do not sell any SKYPE services or products or any MAGICJACK services or products at all.   My opinions are those of a consumer who has tried both products and would like to share my experience with my fellow ebayers.

SKYPE offers FULL service:   SKYPEIN, SKYPEOUT and VOICEMAIL for only $60 per year, if you go with SKYPEPRO and your total annual cost including SKYPEPRO is only $60.   It was $96 last year, but SKYPE has lowered their prices to be more competitive.   If you want to use SKYPE with a regular phone, they sell devices in their SKYPE store, as well as in retailers worldwide, that can easily allow you to do that, such as VOSKY, a nice device for about $50 street price.

MAGICJACK has a greatly hyped web site, but their support is awful.   They advertise unlimited in and out calls and voicemail, with a few other features, for $39.95 the first year for the device ($46.95 or so with shipping), which includes one year of free service, then $19.95 per year thereafter.  There is no phone support and their chat sessions get you someone who really can't help.  They just guess at the problem, the support is worthless.   The gimmic with MAGICJACK is you plug your phone into their matchbox sized device that plugs into your USB port.   What they don't tell you is that their device is very buggy and may or may not work with your computer.   Also, that your existing phone(s) may not work with their device.   Gee, I wonder why they don't tell you that or put up a list of phones known not to work or phones known to work.......    They don't tell this to you on their web site, I found this out the hard way.     The chat rep told me to try another phone, as did a help page that their software points you to (but that you cannot get to in advance of purchasing).   TRY ANOTHER PHONE...... wait a second.......I LIKE my phones that I use now, why should have have to BUY ANOTHER phone just to make it work with your service and HOW MANY PHONES do I have to try out before I find one that works?????!!!!!!

I did manage to get their softphone (the phone that appears on your computer screen) to call out, but when I plugged my regular phone in, it only picked up every other digit or so, meaning my calls did not go through.   Also for incoming calls, my phone did not ring properly.   They offer a beta version for MAC, but taunt you on their web site, almost daring you to use it and say that they will not answer any questions about it.  I figured OK, I don't mind, I have pc's and macs, so if I could get it to work on the pc, that would be good enough for me.   When hooked to my pc, my phone stopped ringing even though I had not yet answered.    Other disadvantages include:

-if you lose the device, you have no service and presumably you also lose your number, they have you sign away your rights with their agreement and make it clear if you lose your device, you assume all responsibility.
-if you want to use your device on your laptop, you have to remove it from your desktop computer.  This means you leave the people at your house with no service.  If you leave it with your laptop when you return to the house, you get no calls in the house.    So you have to remember to keep taking the device on and off the computer where you want to use it.  Also, you have to also KEEP YOUR COMPUTER on and the softphone open, in order for you to get incoming calls.    This is NOT a GREEN product.    Bet your computer uses quite a bit of electricity.     So if you normally turn your computer off, now you have to leave it on.   While with SKYPE you also have to leave your computer on, at least SKYPE it not pushing their service as one that just works on "regular phones."    MAGICJACK is holding themselves out to be for those who don't want to talk on their computer.  With magic jack, you will find yourself having to use your computer more than you ever wanted to, just to make a simple call out or get one in.
-if you want to get calls at home, at the office and on the road, you would need 3 devices, in order not to have to drag your device all over the place.    That would really negate your savings over skype.

Also with SKYPE, you get FREE VIDEO and the voice quality CANNOT be beaten.    You can be talking to someone around the world and they seem like they are right in the room with you, especially on SKYPE TO SKYPE calls with a great headset.   Even if one person is on a regular phone and one person is on their computer with a great headset, BOTH parties will notice better quality than if they had both used a regular landline phone for the call.

It is really nice with SKYPE just being able to log in and have an instant phone on all your computers.     Plus they will ALL ring at the same time, so you can answer it anywhere.

Another nice feature with SKYPE is you can get incoming calls FREE overseas, meaning sometime calls your USA tel. # and you are really overseas, you will get the call there free.    To call back to the USA, you have to pay the SKYPEOUT rates, but you can always call someone, pay a few cents for the first minute, then they can call you back at your USA #, probably free for them if they are in the USA, then you get the call overseas free.

With MagicJack, they advertise calls can be made back to the USA free, but really it is not worth all the hassle.

I consider myself to be fairly computer literate, but I wasted 8 hours today fooling around with magicjack.   The worst part you will find, if you contact their support through chat, you may find yourself wasting an hour or more waiting for a chat agent, and ultimately you will have to re-boot your computer.  Guess what happens then to your chat session, that's right....... KAPUT.      Then you have to start all over.    This happened to me FOUR TIMES today.

With SKYPE, they have a great help area with answers to all sorts of technical questions you will probably never even need to ask, but it is nice to know they are there.

With MAGICJACK, you have a gee whiz type web site with news anchors fawning all over the product, but if you need help, forget about it.   You are really up a creek without a paddle.

MY ADVICE to all my friends and family, stick with SKYPE.   That would be my advice to you also.    If MAGIC JACK actually is still around in a year or so, maybe at that time they will have worked out the bugs, but until then, stick with SKYPE.    You can even use SKYPE for free from one country to another, without paying a dime, if you and the person you are calling have SKYPE and you can even SEE the person you are talking with.   I have even had live video calls while driving along at 65 mph in my car (of course ONLY do this is you are in the passenger seat, NOT the driver's seat) back to my family.  That is really cool.

And I bet that SKYPE will continue to be an even better deal with lower prices, to keep up with the competition, make it completely worthless to fool around with MAGICJACK.    I hope that I have saved you some time and grief.     Maybe my wasted time today will not be for nothing, if others can benefit from my experience.

I hope that you found this guide helpful and will vote YES below.   Your YES vote is my only compensation for writing this guide.   Thanks.