So far the best deal I've seen is the PIN cards. The ones I've purchased are country specific (each card only works in one country). I'm pretty sure they charge you a connection charge plus a low cost per minute. I find I can make at least three or four 20 to 30 minute calls home on a 5 Euro card and still have a little left over. Compare that to using my T-mobile phone in Europe at $1 per minute. I also use them to call ahead for lodging at my next stop.
Buy them in-country at any tobacco shop or newstand. When you buy one have the clerk point to a phone where you can use it. While you are at the phone, look for some logo that is on the booth and your card. I've had cards that didn't work in all phones, it may have been a broken phone but I suspect it was like ATM's, my card and the phone weren't on the same network.
I've had good luck making long distance calls at internet cafes. I'm not sure if it's a general rule but I've used a cafe in Austria several times and the cost was unbelievably cheap.
I'm strongly considering going to a local cell phone for travel because I like the idea of making my calls while I'm moving rather than stopping to use a pay phone. The $1 per minute T-mobile will charge me is too much but a local sim card for a country plugged into my T-mobile phone may be perfect.