I have an AT&T prepaid phone (from WalMart) and it's working out great for me. I got one of the cheaper phones and as I recall it was like $29. I add $25 every 90 days and any unused minutes carry over. I have never run out of minutes, but I hardly ever use my phone.

For long distance at home, I bought a prepaid long distance card at CostCo. For $20 you get 700 minutes, so about 2.9 cents/minute. You call in using an 800 number, so you don't have to pay the all the access fees and taxes my phone company charges for long distance. And you can set up several numbers for PIN-less dialing so you don't have to dial a million numbers to make a call.

I'm all about saving money wherever possible (hence dial-up internet as well), so I love cheap phone options!