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SIP support is already in Gingerbread (and possibly earlier versions too), it just doesn't work with a SIM with voice plans.
Can you explain what you mean by "it doesn't work with a SIM with voice plans"?
The native integration does not usually allow you to use SIP when on a data connection (at least that's how it works for me, I have to be on wifi).

From the article, I understand that if the SIM has a data only plan, then there are no restrictions for VoIP.

This varies by carrier, I don't think it has anything to do with the software.
I would pay Google a decent amount of money for first-party GV+SIP integration.
What a misleading headline! Cheap calls maybe, but not free.

Even if you ignoring the fact that he is paying for the data plan, the author mentions that he is paying "$0.019 per minute" for most outgoing calls within the U.S.

Well, it's just an issue of network effects now. Within a few years, enough people will have 4G smartphones that we'll be able to rely solely on VOIP-to-VOIP calls.
Unless there are big gains in reliability/uptime of IP versus conventional phone systems, I kinda doubt this.
Until carriers block VoIP traffic, because they can Ben under the FCC net neutrality rules that they keep trying to lawsuit out of existence.
Services like Callcentric allow you to other Callcentric customers and open SIP networks for free. Plus they allow you to use any device, mobile, ATA, IP PBX, etc. And with Callcentric you can setup a completely free account and do this. However if you add any paid services there is a 911 fee of $1.50 per month.
This has been possible for sometime. Totally free calls are possible if you have a legacy Gizmo5 account.
Gizmo5 shut down back in April, I believe.
Hmm I'm skeptical. I tried a similar setup with a number of free Voip services, Google Voice, and a Nexus One. The voice quality was very unpredictable, often unusable. That on Wifi no less. I can't imagine trying to do the same on 3G. Maybe I should have paid for a Voip service? ... What would be nice is if Google opened up direct sip access to GVoice.
Try GrooveIp, it's not SIP access, it's Jabber/XMPP access and it's like $4. (I am not affiliated).

Also here: http://code.google.com/apis/talk/open_communications.html

1. What is "client choice" and how is Google Talk enabling it?

In addition to the Google Talk client, there are many other clients out there that provide a great communications experience. We believe users should have choice in which clients they use to connect to the Google Talk service and we want to encourage the developer community to create new and innovative applications that leverage our service. To enable this, Google Talk uses the standard XMPP protocol for authentication, presence, and messaging.

I use VoIP all the time, Callcentric. I've never had problems using my iPhone and Acrobits (using G.711u and G.711a audio codecs) and making calls to US/Canada numbers. As long as my WiFi connection is good then the call is great as they use the same Tier 1 carriers everyone else uses in the US. If you're having problems with call quality it's probably an issue with your connection.
My Nexus One, and several little cheapo tablets I have make free outoing calls over wifi and receive incoming calls using GrooveIp (which hooks into Google Voice).

The Nexus One can also make GrooveIp calls over 3G, and I have it also set up using sipgate to receive sip calls, but also receive "real world" phone number calls using a free phone number from ipkall.

It all works so well, that I've considered just buying a Xoom LTE tablet, and using that as my primary phone. The only reason I've decided against this, is that sometimes, I really want a phone I can stuff into a pocket.

What is intriguing about this article is the mention of a $40 unlimited data plan from T-Mobile.

Is that for real? Does that still exist?

I assume it's not LTE, but HSPA+.... but still, that has me thinking....

The $40 unlimited plan would seem to either not exist, or be this 2Gb plan with reduced speeds after 2Gb: http://www.t-mobile.com/shop/plans/mobile-broadband-plans.as...

Last night, I determined an hour of netflix on my at&t nexus is the better half of a gig, and twice that on a xoom lte I am testing. 2Gb of data is nothing -- but that does seem to be the $40 "unlimited" plan, in which unlimited means throttled speeds after 2Gb.

I ran my Nexus One off the unlimited $40/mo data-only plan for its first two years and saved around $USD2000 vs buying subsidized, but it appears that they dropped it in favour of the $50/mo plan. You'd still save a bundle vs the subsidized phone+full plan over the life of a 2-year contract.

I'd always get the weirdest looks when I went in to a T-Mobile shop since I was grandfathered in to the old plan and they had never seen it, so that was always fun.

You can also get a plain old bring-your-own-phone pay by the month plan from T-Mobile for $30/month that gives you 100 minutes of voice, unlimited texts, and sorta-unlimited data (1st 5GB at 4G and then it degrades)
I was tethering my old Nexus One to my Roku for a couple of days when I moved; it was enough to push me over the soft cap. Believe me when I say that their throttling is more than noticeable. It is worse than Edge.
Not the same , but can use GrooveIP https://market.android.com/details?id=com.gvoip&hl=en , for voip calls through google voice.
I tried Groove IP, but the echo makes it unusable on my Nexus S (I've tried all settings, etc).

Does anyone have it working flawlessly, and if so, what device?

I have it working pretty well on a nexus s, with the echo canceler enabled, and the auto detect option.

Also, talkatone is supposedly coming out with an android alpha in the next 7-10 days.

Echo on voip connections is very often the issue of service provider. If you get echo on some destinations more than others, try reporting it (to google in this case) - maybe they can tweak the handling of some interconnects.
Personally I'm not worried about free calls via VOIP anymore. I have a plan on 3 UK with unlimited wifi and ~2000 minutes of calls a month for £25. I certainly couldn't use any more than that, and for any overseas calls, I can use Rebtel at next-to-nothing rates via a local number (ie included in the 2000 minutes).
I suspect this would be a lot more valuable to US customers, where that kind of price on mobile minutes is unheard of.
How does this affect battery life? I know that GSM have been highly tuned to drain as little battery as possible just to listen for calls and such, but i recon this has to poll some kind of service other then the cell tower, which should consume more data and take longer time?

Personally I use Google Voice (or skype for that matter, I just prefer GV) for international calls, and my provider in scandinavia. And yeah, I got GV for some strange reason, I guess it has to do with Nexus One and a glitch with Google or something...

Probably not much. Unless you have a provider which loves bruteforce approach of nat handling (callcentric forces a refresh every 70 seconds or so, resizes the window based on some behaviours), then you can be ok with around 2 packets every 10 minutes. If your connection is already live (email check takes much more traffic), then you shouldn't see much difference in usage.
Gingerbread's built-in SIP client is great; I couldn't see a noticeable difference in battery life running it all day. Before Gingerbread, I ran Skype, which couldn't get through a full day on a single charge. Before Skype I tried SIPDroid, which was a lot better than Skype, but not as nice as the built-in Gingerbread one.

My Skype account had lots of contacts and lots of chats open, so that may have had an adverse effect on battery life given that the communication is all P2P and required keeping an insane number of sockets open.

Carriers will disable this as soon as it gets even remotely popular, because carriers don't understand what business they're really in.

Carriers think they're communications platforms that add value (Visual Voicemail only from AT&T!) and content channels (Exclusive Droid Bleeding Rocket Glass Metal Extreme Explosion DROIIIIDDD NASCAR app!).

Savvy users understand that they're just wireless dumb pipes and know that cellular voice has been VoIP for many years now and also remember how long ago links between COs ran on fiber.

Of course carriers are going to hate this, and will disable it. The question is how. The easy way is to disable it in software, which means anyone running stock Android or Cyanogen and friends will be unaffected. Whether they go beyond this is another question. Are there enough users running software of their own choice to be worth the bother?
It's not that they 'don't understand' it is that they don't WANT to be (seen as) a dumb pipe. Funnily, they quite like charging ~10c for a text message that costs ~0.0001c in data, etc. Price only competition isn't attractive. It's about time we got a proper wireless ISP!

~* not accurate. and i know text message transfer works in a different way but it is not relevant.

Cellular voice is only VoIP once it gets to the cell base. It is still CDMA/GSM over the air. The cellular companies have spent many hundreds of millions of dollars researching how to most efficiently compress voice into a narrow spectrum. I would think that VoIP OTA would be quite a bit less efficient.
Cellular voice isn't VoIP for CDMA, GSM or W-CDMA. Depending on the carrier it may be VoIP in the backbone part of the network, but the critical part over the air is circuit switched voice traffic. This changes with LTE, which is the first all IP wireless standard.

So what do you get with cellular voice that you don't get with VoIP over cellular data? For one thing, when a voice call is set up it will get guaranteed resources with a delay guarantee, so your call will not be dropped so easily and the number of lost and late packages is minimized. Also, when doing handover to a new cell tower you'll be prioritized to minimize dropped calls.

For LTE, the carriers will likely offer voice plans that have similar characteristics. So your VoIP traffic will be prioritized compared to normal data. If you run a normal VoIP client, you'll have the same prio as data traffic, which will give you more dropped calls, lower call quality due to dropped or late packets etc.

That's how the carriers can compete. Is it worth to pay extra for? That depends. In some areas where the networks are congested, you may not get a call through on normal VoIP while it would work perfectly on the carriers voice plans.

People who do this are very annoying(aka CHEAP!). Mainly because most VoIP calls have low quality and have static issues. When you call me and I can't see the number of the person who's calling, that's annoying. It's also annoying if you break up or I can hear a time delayed echo of everything I just said and then have to wait for you to hear it. When this happens I don't want to talk to you as it's a painful experience. If you can't afford $20/month for a voice plan then perhaps you should just have a tablet and stick to e-mail?
Most of these people (and I'm probably in the demographic, though I haven't yet made the leap to VoIP-only) probably would prefer to "stick to e-mail". But the world still forces us to have telephones. Why should we be forced to pay for voice plans we rarely (and grudgingly) use, and subsidize all you bluetooth-adorned yackers in the process?
It's their own choice to stick to e-mail, that's a seperate discussion as not using a phone would definitely affect you in this society.

My point is that using VoIP may be cheaper, but it is of vastly inferior quality and will annoy the person you're talking to. If you only use voice once in a while buy a bunch of minutes, you're not subsidizing anyone as the network wouldn't have been built without voice, so one could argue the voice users are subsidizing YOU.

> If you only use voice once in a while buy a bunch of minutes

Maybe you could explain that more? Smartphone data plans and prepaid minute phones don't overlap... are you suggesting we carry two phones?

It is a killer combination and I'm doing it for a while with Nexus S and CSipSimple App while roaming abroad.

I'm from Europe. And best part is that my mobile operator has SIP gateway, so wherever abroad I am, I always get myself local 3G data SIM card (it's 10 EUR for 1GB on average) so I can use data as much as I want, and I can call and being called (with my own number) with prices just like I would be back home - cheap.

Even better is that I can also send SMS with same app (again from my own number). Classic way, when abroad it can be anywhere from 0.15 EUR to 0.40 EUR per SMS when roaming.

Sending SMS works on EDGE, but for calling it needs to be 3G. Sound can delay from time to time, but it's a small price for keeping home-network-prices wherever in the world I am.

I've been doing this for 2 years. My setup is a 3GS with an iPad data plan from AT&T. ($29.99/unlimited). Talkatone hooks into google voice for incoming and outgoing calls. The app is free and I paid a token amount to make the ads go away.

Compared to apple's Phone and Messages, Talkatone is complete shit. It mostly works, all the while looking horrible and feeling worse. At least 25% of my incoming calls don't connect when I answer them from another app. The audio quality isn't great. (google's voice app is a bit better but it's still an offense to any decent iPhone app. And it only does texts and connects calls to your actual phone number with a callback.)

There are some hacky VOIP/SIP solutions for the iPhone. But having it call through google's servers is killer and offsets the horrendous UI. So thank you talkatone.