sucks

doesn't
suck

Hardware: Requires a converter, but when I signed up Vonage provided a free model (or free after rebate), depending on the version you want.  I went with a Linksys Vonage wireless unit that also serves as my wireless internet router.
 

Set-up: While set-up instructions are pretty straight forward, it still required about 30 minutes on the phone with support in India to get it working.  The converter box I bought (a wireless unit) actually needed some time to download some required files from the Vonage mothership.
 

Reception: Most of the time the service is ok.  But that's the problem, most people have a zero tolerance for poor reception for a "land line".  Occasionally I've had unclear reception, and around 3-5% of the time people on the other line can't understand me.  It seems to happen in cycles, not sure why.  We all know how frustrating it is when someone can't hear you on your cell phone (or vice versa); it goes double when you are on a land line.

Cost: After a free first month (or whatever discount you received), it is about $25 per month for my service.  My regular long distance and local long distance bills total around $75-$100.
 

Features: Very good, all free - check your voicemail online, email notification of new voicemail, *69, caller ID with name, call waiting, caller id block (*67), etc.  I've never tried the 911 line but they say it is fine.

Fault Tolerance: One thing people don't think about. If you lose power or your internet provider is down, you are out of luck, Vonage is hosed.  If your converter or modem is blows up, so is your Vonage phone service.  So, if you have visions of this replacing your regular home line, keep this in mind.
 

Quirks: One of the issues I've had, (besides the occasional inability to be heard!), a problem when punching in numbers to dial or, as often happens on my conference calls, to punch in access codes.  Occasionally the Vonage phone simply doesn't registry the digits.  For instance, I'll punch in 12345, and the conference line will only received 1, 4&5.  This is very frustrating especially when you are late for a call.
 

Other people's experience: One friend tried Vonage and just couldn't get it working, 2 other peers at work hate it due to the Reception and Quirks issue.  And eBay is not short of Vonage equipment (see below), obviously a function of both the popularity of Vonage, and the amount of people that have given up!

Overall: If you have the need or means to have a second home line, I'd certainly try it. But wouldn't replace the main home line with this service yet, even if it means I'd save over $700 in a year!  The hassle with the dialing and the reception is just not worth it yet!