In the right Voice over IP environment, you need not use a phone tethered to a particular location, and you can be as reachable as you want. In the usage of Voice over IP telephony the phone becomes a virtual device that follows you wherever you go, with all its advanced features and your personal customizations intact.

When the calls come in, the Voice over IP system can sense your current "presence" state and make sure the really important ones don't end up in voicemail. It can even refer to your calendar to determine where you are and how a particular call should be handled.

In order to understand how the above applications are accomplished through the use of the Voice over IP technology, it is first important to understand how the Internet Protocol works. The internet is based on a technology called TCP/IP (Transmission Control Protocol / Internet Protocol) where the IP part is essentially Packet Based.

This means that multiple connections can be transmitted over one connection at any instant of time, unlike the traditional Circuit switched way. This is possible by dividing each connection into small packets and multiplexing them across the same connection.
There is no dedicated connection - every one can communicate using the same connection - this is achieved by breaking each session into discrete packets and multiplexing all the packets one by one across the same connection.
The phones we have communicate using a protocol that is suited for the PSTN world - their signaling format is different from what is used in the internet and hence there needs to be some conversion to and from the PSTN to IP world in order for them to inter operate.