VOIP is an internet phone service - you may have heard of Skype, which is similar and uses the internet for phone calls. You can use your computer and headset, a handset plugged into USB port, or your normal phone via an adaptor.
I wont go into detail, but Google on 'VOIP' and 'free' for more info. Or read the newsgroup at uk.telecom.voip. They are essentially PAYG services with NO line rental.
I have signed up for a free local number from http://www.sipgate.co.uk .
But some others to consider are:
http://www.voip.co.uk - free geographic number but £10 credit required,
http://www.voipstunt.com - free calls to UK landlines
Also Tesco will be launching a service for about £20 which includes a free new phone number and handset