Voice Over Internet Protocol (VoIP) is all about exchanging voice data through the internet. VoIP is a phrase used in IP telephony for a set of services using the Internet Protocol (IP). You can call any person across the world, not at the rate of a standard call, but for FREE. (excluding the cost for your internet connection). Voice over Internet Protocol (VoIP) utilizes IP architecture to provide the equivalent to traditional telecommunications providers that use the Public Switched Telephone Network (PSTN). The main benefit to VoIP is that a VoIP long distance call traverses the low-cost worldwide Internet infrastructure for the long-haul portion of the call, rather than having to pay high rates established by incumbent international carriers.

Speech is carried in packets that use the Real Time Protocol (RTP) standard. Each RTP packet contains a piece of a digitized word. Multiple RTP packets, when combined at the receiving IP phone, produce a spoken word. The RTP IP PBX vendors commonly implement RTP. Proprietary protocols that operate like RTP are uncommon. The speech paths connect directly between phones and gateways.

There are several VoIP standards available today like SIP, H323, MGCP.  They all operate slightly different.  SIP being the main player and is slowly being recognised as the standard for VoIP communication.