Instead of actually talking over a pair of copper wires, as in the standard telephone system, VoIP simply converts your voice from an analog to a digital signal and sends it over your broadband connection as data. It is routed over the internet and to your intended destination where it is treated again as a standard telephone transmission ... your called party sees no difference, if your connection is fast enough.
When you are the called party, your caller dials your number which, because it is a VoIP number now, is routed over the internet and through the Vonage network to your Cisco phone adapter causing your phone to ring.
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