Voip works by taking your voice traffic and converting it from analog form (which runs over copper wires) to tiny digital packets and then sending them out over the internet, instead of the regular old phone lines. When they get to where you're calling, they automatically get converted back into an analog voice signal.

There are a couple of ways to use voip to make calls. One is PC-PC, where you connect a headset with a microphone (or USB phone) to your computer and talk to other people on their computers using software programs like Skype. You can also sometimes call out to other people's phones.

The other way involves attaching a special voip adapter to your internet connection and then hooking your regular phones up to the adapter. You make calls the same way you did before, only they travel on the internet, instead of over regular phone lines.

Voip is better than old-fashioned phone service, in that you can do a lot more with it (like chat, video, IM, etc…) and it's generally a lot less expensive than traditional phone companies.

The down side is that it's dependent on your internet connection, so if the power goes out or your service goes down, you won't have a phone. Some people use UPS devices to keep their service up through short power outages. Also, people will keep a basic landline because it will still work in a power outage. I don't know how emergency services work where you are. Over here, in the US, they are traditionally tied to a specific location, ie- the subscriber's house. With voip, because you can take it with you anywhere, it makes emergency response a little more tricky. But there's always the cell phone.

The other thing to consider is voice quality. The better your connection and input hardware (ie-your phone, usb phone, or voip headset w/mic), the better sounding your voice traffic will be. A lot of the time people won't even know the call is being run over voip. Especially if the regular phone lines aren't well maintained, or are susceptible to degradation from water intrusion and stuff like that. It's a real problem where I live.

Starhub looks like it's based in Singapore, so I'm guessing you're out that way also. I haven't used Starhub, though the website is nice, so I can't give a recommendation one way or the other. Some important things to consider are customer satisfaction, quality of service, and whether or not there are complaints against the company. Also, do you have to sign up for an extended term, or is there a trial period available?

I use voip.com and get unlimited free calls anywhere in the US, Canada and Puerto Rico for under $20 a month. If I call internationally, my rates are way cheaper than they were with my old phone company, which is good, because I've got friends in Ghana and Mexico City! They also gave me an adapter and a free trial period of 30 days. Works for me
References :
http://voip.com

Advantages:

1. It's usually much cheaper than regular landline service (about half the price)
2. Since it's Internet-based, your number has no physical boundary, so you could take your VOIP modem anywhere in the world and continue to use your regular telephone number.
3. You can usually get a number from another city if you wish, so that if you have a lot of friends and family in a different area they can call you as a local call.

Disadvantages:

1. The quality can often be quite poor since it relies on the public Inernet to carry the signal, can frequently lose connection alltogether.
2. If your power goes out - no phone
3. If you have to call 911, you won't get a regular 911 operator, you'll get a Starhub operator who then requests all the information of where in the world you are (since you could be anywhere), this means if you can't talk, then 911 won't help.

Hope this helps a bit.
References :

~Danielle~