Viber is a new free VoIP app for the iPhone. It allows you to talk using the AT&T data network, rather than the cellular network. I kept looking for a catch, but there isn't one. Works on WiFi and 3G. Check. You don't need to create a friends list. Check. Alerts you to incoming calls without the app being open. Check. No ads. Check.
International and domestic calls between 2 Viber equipped iPhones are free. You aren't burning your voice plan minutes, and soon there will be an Android version. Of course, if you have a metered data plan, you may have to watch out to make sure you don't exceed the limit, but many long-time iPhone users are still hanging on to their unlimited data contracts.
In my tests, voice audio quality is terrific. It makes you realize how bad the AT&T wireless voice audio quality really is. Registration for Viber is completely pain free: you give Viber your phone number, and then they text you with an access code. You enter the access code into the app, and then you are on your way.
The Viber interface looks just like the built-in iPhone dialer. You can see your regular contact list; the difference is that friends who are on Viber are marked so you know who you can call for free. You can even call out to non-Viber equipped phones, but you'll use your regular minutes.
I'm not really sure how this app made it by Apple and AT&T. Apple has complained about apps that duplicate built in functionality, or mimic the iPhone GUI. This does both. On the other hand, Google Voice finally made it onto the iPhone, and I guess competition may be persuading Apple to lighten up.
I tried both domestic and international calls. Everything worked, but one call dropped when the caller moved into an area of bad 3G reception. There really aren't any negatives to this app. It's free, it works, and it doesn't require the app to be running to be useful. Of course here in the US, calls to other AT&T phones aren't charged anyway on most voice plans, but when Viber shows up on Android and other handsets it's going to make a small dent in the communications universe. Remember that if you are overseas you could be getting high charges for just using data. Be sure you know what your data plan says before using this app from outside the US.
I'd suggest that you don't walk, but run to the app store and download Viber. The developers say they are working on iPod touch and iPad versions. You can install the app on an iPad now, but you get a warning that it won''t work. I don't know how the developers expect to make a business with this app. I'm guessing additional services and features will cost money, but as of now I don't see any downsides to Viber. It's easier to use than Skype, and unlike Skype it alerts you to incoming calls without requiring the app to be running. Viber also lets you know if you missed a call. The app requires iOS3.0 or greater. Here's a video showing how Viber works.