Put simply, it will enable iPhones to switch from GSM to WiFi (when WiFi is nearby) on-the-fly in order to save cell minutes and bypass the hassle of manually changing over.
From the iCall website:
• Make and receive calls over WiFi
• Transfer inbound calls from your cell to WiFi instantly
• Access your same address book
• Customize your voicemail options
When I first saw two prototypes of the original iPhone in September 2006 - the second unit I saw had this feature built in - being able to transfer calls from GSM/Cell to Wifi - seamlessly. It was a little buggy and required a Skype account - this may be the reason Apple dropped it. I assume the reason Apple axed the feature was because of AT&T requesting it be dropped.
This will be useful for those who don't have the unlimited plan on AT&T. If this turns out to be a good program I might try it for one month to see how much I use it and see if I can reduce my plan costs. Right now, I pay $119.99 for the unlimited plan ($99.99 unlimited voice + required iPhone unlimited data plan: $20.00). I would love to get that down by $40 so I can pay for my 3G modem access.
* VOIP allows phone calls over the internet rather than land lines or cell phones