Software Phones: Software-based SIP Phones
A VoIP phone, also known as a SIP phone or softphone (software telephone), allows users to make calls to any softphone, mobile or traditional line using voice over IP (VoIP). In this way the voice is carried over the internet instead of through a traditional PSTN system.
A VoIP phone can be simple telephone software or a hardware device similar to most common phones.
Some of the common features of a VoIP phone are: displaying the caller's number (caller ID), call parking, call transfer and putting the call on hold.
Examples of SIP phones are the SJPhone by SJlabs (http://www.sjlabs.com), the Xten (http://www.xten.net) or the 3CX VOIP phone system for Windows.

X-Lite Software

VOIP USB Phones
A USB phone connects to the USB port of a computer and uses software to function just like a telephone. Essentially, it is just a microphone with a speaker, and perhaps due to its normal telephone appearance, users tend to adapt to its use more easily.

USB SIP Phone

SIP Telephone Hardware
A telephone based on SIP hardware looks and feels just like a normal telephone. However, it is connected directly to the LAN network. These phones have an integrated mini-hub, enabling them to share the network connection with your computer, so you don't need a separate network point for your phone.
Examples of SIP-based telephone hardware are the Grandstream (http://www.grandstream.com/).

Grandstream SIP Phone

ATA Phone Adaptors
These devices allow you to use a normal analogue telephone with the VoIP phone system. An ATA adaptor can be directly connected to the LAN network, and one or more traditional telephones can be connected directly to the ATA by means of normal telephone cables. In this way the VoIP phone system software will recognise an old telephone as a standard SIP phone.
This type of choice is definitely recommended when you need keep cost low. In fact with a device of this type you can use up to 4 analogue telephones for much less than the purchase of 4 hardware phones.

LinkSys ATA Adapter