On our just-completed trip to India we were really fortunate to have an Indian wireless phone provided by a friend of son David. What about all the other times when we're not so fortunate?
For starters, we have Skype installed on our netbook, and can call anywhere if we have access to an Internet connection.
Our quad-band ATT phone allows us to make and receive calls if we want, albeit it an expensive rate that can approach or even exceed $2 a minute, depending on the country. We also use our phone to send and receive text messages, which is far more cost-effective.
A travel column in the Washington Post, while a few months old, provides what looks to us like a reasonable overview of the options available. If anybody has any better (cheaper!) ideas, please let us know. In the meantime, you can read it here.