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Voice Over IP (VoIP) is the delivery of voice communication over IP. So a VoIP telephone acts like a normal phone except it runs through the internet. This means that call costs are often much cheaper.
Other terms that are very similar to VoIP are IP Telephony, Internet Telphony and voice over broadband.
VoIP (Voice Over IP) is used to transfer packets of the human voice and can be useful for things like, conference calling.
According to Wikipedia VoIP is:
"Voice over Internet Protocol (VoIP) is a general term for a family of transmission technologies for delivery of voice communications over IP networks such as the Internet or other packet-switched networks."