I got a couple comments from people on how do they turn their iPod Touch into an iPhone so I wanted to give you some easy instructions to follow. Get out your saudering kit, a rubber band and prepare to void your warranty! Just kidding, you will be able to do this easily and quickly, but it will cost you some money, you will have to buy Skype credit for phone calls (or get some friends on Skype to call for FREE). You will also need a wi-fi connection for your iPod Touch.
Here we go:
You should install Skype on your main computer or laptop. Go to http://www.skype.com/ and download, install and get a user name/password and log in. Lastly, buy some Skype credit ($10 minimum) for your account. I already had Skype on my computer (with Skype credit) so I didn't have to do this.
Next, get on your iPod Touch and download and install the Skype application onto your iPod Touch (just do a search for Skype). Enter your user name and password to log in to Skype on your iPod Touch. The app is free, as in no-charge.
Lastly, get the Apple headphones with microphone (http://store.apple.com/us/product/MA814LL/A?fnode=MTY1NDA1MA&mco=MTY1ODg2OA) or the $79 Apple InEar headphones to talk through. Or, you can have a cool friend like I have (Dave, this is you) that will give you their old iPhone headphones with microphone and you totally get to skip the buying part of this step.
Now, if you want to call a Skype contact that you have (and they have a headset) you can just call them and everything is FREE. If you want to call a phone number and make your iPod Touch call phones (even iPhones!) you go to the dial screen and enter your phone numbers. Skype costs like 2 cents per minutes when you call so you could run through your $10 pretty quickly (not really, I buy like $10 a year).
P.S.: Since I have done this I have heard that you can use almost any phone headphones and microphone cable that will plug into your iPod. I tried this with my Blackberry headset and it did work, but the Blackberry headset is not as cool as the all-white headphones from Apple.
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