I wired the whole house with vonage yesterday afternoon. For those unaware of what Vonage is, it is a Voice over IP (VoIP) service that you can use over your cable modem (or other high speed internet) connection. It's unbelievably inexpensive compared to the good'ol Phone Company and usually very high quality.
The biggest shortcoming in Vonage's "service" is that they will not officially tell you that you can use it on every phone in your house (the way that they tell you to use Vonage on multiple phones is complex and unwieldy). However, it can very easily and simply be done, and there's no need to buy anything more than about $20-$30 worth of stuff that you may already have laying around the house.
Stuff you will need to do the job:
- Screwdriver
- Telephone cord (phone to wall not phone to handset). This you will want to measure how far away your "Telephone Network Interface Device" (NID) is from where you want to locate your Vonage box. Mine was about 180' because we wanted the Vonage box on the desk in the office.
- Wire cutter/Strippers
- All the hardware that came in your Vonage box.
- And a Vonage or other VoIP adapter with active service of course.
- Liquid insulation (Alternate Configuration Only)
Getting Started:
First: Hook up Vonage per instructions in the Vonage box.
It is very important to be sure that the service works. Setup according to the directions provided in the box that you receive after you sign up for the service. I'm not going to repeat them here, as they are spelled out in the Vonage instructions. After following these instructions, should have one fully functioning phone hooked up to Vonage.
Note: If you are waiting for your local phone carrier to move your number over to Vonage, do not proceed until that is done. You will have to stick with that one phone hooked up until after you get firm conformation that your number has been successfully transferred. This only took AT&T about 3 day but may take a week or more. Do Not Do anything else unless you want your phone number to ring as "busy" during that entire time.
Number Two: Disconnect Your Inside Wires from the Outside Phone Network Box
NOTE: Most phones get power from the phone line, so there is a limit to the number of phones you can connect to a VoIP adapter. Your mileage will vary, but you'll probably be able to use three regulare phones with the average VoIP adapter. If you've got lots of voltage sucking phones, then you might want to pick up a ring booster.
Okay, another VERY important note. As long as you're not using the connection anymore this is OK to do this. Plus, if you leave the wires connected and have Vonage wired to it as well, bad things can happen (more on that later). This is the most involved step in the whole process, so once you get through it, you're super green! You can think of this as cutting the leash and take control… Wa, ha, ha, ha (loud evil laughing).
Find your "Telephone Network Interface Device" or "NID" on the outside of your residence. It should look something like this.
Our typical access box. There's usually some sort of customer access area. In this case, we have to loosen a screw and the cover pops open.
(NOTE: If you don't mind going into the telco side of the box, you can disconnect the line without cutting. This is how I did it. If you want to do it this way skip to the alternate configuration after reading all the following steps)
Open it up. Proper application of a screwdriver (or a dime) gains access to this rat's nest. (I used a flat head screwdriver). It's ok. Legally, you own all of the wires inside your house including the ends that stick out into this box. Don't break the box, though, as you'll want it to be working if you ever go back to traditional telephone service.
Once open, disconnect all of the connections marked as "TEST" to prevent being shocked. You may have to unscrew something and unwrap the wires. Mine were connected with standard phone connectors. It'll look something like this:
Some module pops open to reveal some color coded screws. 
Since our VoIP line will be the primary phone, we're disconnecting the red and green leads. Since splice together the two sets of red and green wires. Normal phone wiring has two pairs. If you're keeping your regular line, or have DSL on it, the yellow and black wires are the pair to use for a secondary line throughout the house. Inside the box, two of the wires were terminated at the screw terminals. To complete the internal network, they need to be spliced together. We used standard weatherproof splice connectors available from any hardware store. To attach them, just insert the unstripped wires and squeeze down the circle with a pair of pliers. When you're done close up the box.
Third: Connect your VoIP to an available phone jack
Our VoIP adapter just has three ports on the back. The Ethernet goes to our router, and now it's safe to connect the phone jack to a wall outlet inside the house. Now our VoIP adapter can live happily on a shelf next to our routers, where it gets a UPS, and delivers phone service to the rest of our house through a pre-existing phone jack.
Alternate Configuration
The only thing I did different is rather than disconnecting the phone wires that go into the house I disconnected the phone wire going into the "NID" from the "Phone Poll"
I ran phone cord from the desk through the outside wall and around the house to the "NID". Then I connected in the wires connected to my Vonage box. That took about 180 feet of cord. It is really nice to be able to plug a phone into any existing phone jack in the house and have it just work!
I used the liquid insulation to fill in the hole I drilled through the outside wall.
Doing it this way eliminates the need to plug the Vonage box into a wall phone jack as it is hook up directly to the "NID".
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