I have used Vonage for three years, and am very happy with it. One of the great things, for me, is that it keeps the same phone number no matter where it is hooked up, so when friends and family from the States call me, or I call them, it is not an international call, even though I am not in the U.S.
If you DO go with any Internet-based telephone solution, make sure you read its 911 policies carefully, since your phone will not be connected to a regular phone line in your house, but to the Internet. Thus, you will have to sign a special form stating the address to be used for 911 purposes. Furthermore, if you lose your Internet connection or power, you will not be able to make or receive ANY calls, including 911 calls. A lot of people consider that to be too risky - they want the security of 911, but it really isn't THAT big a deal if you also have a cell phone.
As to the cell-only option: it's not for everyone, either. The biggest thing to check with cell phones (and it can be VERY big) are the prices. Many of the cell phone companies have outrageously long contract terms that charge you severe penalties if you terminate your service before the end of the contract. That means that if you get a cell phone that sounds like an otherwise reasonable deal, only to discover (one day after the initial trial period) that it doesn't REALLY provide the coverage you need, then you are stuck either staying in the contract or paying stiff penalties. Even with one-month trial periods, I have known people who ran into difficulties with that.
Regardless of whether you choose VOIP (e.g. Vonage) or a cell phone, don't forget about some things that may only work properly on regular phone lines (or that would require special, additional options otherwise). The three main problem areas are faxes, digital video recorders (e.g. Tivo), and alarm systems.
Unless you do huge volumes of faxing, or have other special faxing needs, you can get by very well by using a combination of web-based services. The ones that I use and recommend are
http://www.k7.net for receiving faxes (a free service that can send received faxes right to your email), and
http://www.interfax.net for sending faxes (good, inexpensive rates, and your balance doesn't expire). I suggest that combination, since K7's service for sending faxes is not as user-friendly, and your balance does expire after a certain amount of time, requiring you to recharge it. Also, Interfax's service for receiving faxes is not free. Thus, K7 is better for receiving, and Interfax for sending. Do NOT, however, try eFax: despite their being better known, they are NOT as good a service, and they require you to use THEIR proprietary software. K7 and Interfax use normal, everyday software that you already have.
Digital video recorders are very popular, but they rely upon regular phone lines to call out, in the middle of the night, to get the latest program scheduling. This just does not work on Internet-based phones, and I don't know of any ways to adapt them to cell phones.
Security systems have a similar problem: in order for them to send signals (not just pre-recorded voice messages) to the police, fire department, or other monitoring agency, they must use regular phone lines.
Hope that helps.