I have had Vonage for over 5 months. Overall I like it better then traditional phone service due to pricing and features baked in, but I would have to say it is not as reliable as traditional phone service. It is only as reliable as your internet and local area network within your house....I would say it is very reliable, just not as reliable as traditional phone service. I have had a least 1 incident a month where I pick it up, don't have dial tone, and need to reset the cable modem, wireless router/ap, and phone hub and its fixed.
In addition, you need more cat 5 connections or to bridge it via wireless access points if you want to utilize Pay Per View on demand via your dish or direct network. Right now, I have one phone down stairs where I have a dedicated cat 5 connection, and then a wireless slave phone unit upstairs. So all of the built in phone connections that come with your house may not work and then you cannot plug in your dish or direct boxes to your phone jacks...
Definitely a better option, but some things to think about cause it is easy to plug it in and get one phone up and running, but a number of items to think about.