what should we use to call back to the USA while in Europe?

I like to have a prepaid phone card in case skype isn't an option. I would recommend the AT&T virtual prepaid international phone card. It costs $30 and most calls are around 7 cents/minute. You need to get the country codes for the countries you are visiting . These are available on the AT&T site where you purchase the card. I try to use it in hotels and not pay phones. The surcharge for pay phones tends to be very high.

I would take my computer and use Skype for free calls with video.

I would do the phone card thing. Disagree with the advice of bring a computer if its only purpose is skytype. If you are bring a computer anyway then skytype is an option. But bringing something that weights several pounds and that cost hundreds or thousands of dollars and is a target for thieves to save a couple of bucks in long distance calling seems silly to me. Phone cards are in general cheaper than a cell phone but less convenient. (Just like here) Depends a lot on what you need to the phone for. If just to call home every few days to let everyone know you are safe and remind the neighbor to water the plants -- phone card is probably the best option. If you need to be reachable in case of an emergency (e.g. you are leaving kids at home) cell phone gives you an number that folks can reach you at. You can buy a prepaid phone card over there for cheaper than you can buy it here. Hotels will vary, by hotel. Just like here. Make sure you know what the rates are before using the room in the hotel.

We did skype through a wireless ipod. Really easy, cheap and clear.

Arlene, To begin with, which cell network are you currently with (that doesn't provide "international usage)? Could you elaborate on what type of calling you anticipate doing while in Europe? In reading your post, my impression is that you're mostly interested in voice calls back to the U.S., rather than calls within Europe. I don't tend to favour either Skype or phone cards, for various reasons. With Skype usage is limited to those times when Wi-Fi access is available, either at the Hotel or a Net Café. While phone cards can be useful and relatively cheap, I've noticed a significant decrease in the amount of pay phones in various parts of Europe (probably due to the fact that most people there have at least one Cell phone). Finding a phone when you need it could take some time. Given the fact that you want to use the phone in several countries, you might have a look at some of the "travel phone" firms such as Roam Simple, Call In Europe, Cellular Abroad, Telestial or Mobal (there are others but these seem to be the largest ones). They can provide both inexpensive Euro Cell phones or just SIM cards for those that already own a compatible Phone. The calling plans tend to be mostly post-paid rather than PAYG, with calls charged to a credit card. There are some potential issues with this approach, as if the phone is lost or stolen, the user may be liable for charges until the theft is reported. You could also buy an inexpensive PAYG phone when you land in Europe, however when this is used outside the country of purchase, the rates would increase as you'd be "roaming". With PAYG phones there's also the matter of "topping-up" and the possibility of "running out of minutes" in the middle of a call. Good luck!

I don't pack a computer. So far for me, the international calling cards you buy at newstands have been the cheapest option. You have a choice between cards that work in multiple countries and cards that work only from the country you are in. I choose the card that works from one country only. It's the cheapest per minute option (and I'm leery of a card that may not work as advertized in the next country). I get low value cards so I'm not out much if I don't use it up, I can always buy more. You can buy calling cards here (Costco, Walmart and, I'm sure, others sell them). They will run a little higher per minute than a single country card purchased there. Next trip is confined mostly to one country so I may do a prepaid local SIM card for my quad-band cell phone. The card is only cheap in the country you purchase it in. Outside of that roaming charges can eat up your value pretty quickly. The best part of using a cell phone is not having to find a pay phone everytime you want to make a call. A cell phone from here that is capable of international calling isn't a good deal at all. My Razor phone (purchased because it was quad-band) can do international but the rates are in the range of $1 per minute in many western European countries, to $2 per minute in Scandinavia and $4 per minute from Russia. One other option that may be available. If you can find an internet cafe (once popular, now dwindling), you may be able to get super cheap international calls from them (they're probably using Skype).

A phone card is a great way to go for traveling abroad. You'll be able to find phone cards locally in each city you travel to call back to the US, but the rates will definitely vary. Taking one with you, however, could give you peace-of-mind. Were I traveling outside the USA, I would want a phone card I know would workotherwise what's the point in having one? I'd personally buy a phone card with no additional fees since it is likely I'd be making more than one call. I'll pay a bit more per minute, but I'm okay with this because I know I won't have any hassles. TIP: If you buy a phone card with the cheapest rate possible it is most likely going to have additional carrier fees, which will reduce the value of the card ($/minutes) when assessed (immediately upon hanging up at the end of your first call). You can avoid this by purchasing a lower denomination (i.e. $2), but again this might be a hassle for some people. Here is a nice comparison of some phone cards which may work for you: http://speedypin.com/phone/cards/USA/United+Kingdom You buy a phone card online and the PIN and dialing instructions are sent to you via email... very convenient.

You could always visit a internet cafe, and make a skype call from there... It would be much cheaper than calling from a phone, especially if you like to talk for hours ;)

I would agree Skype is the way to go. If you have a smartphone that has WiFi capabilities (or even an iPod Touch) you can use that with a WiFi connection. Last year I used my iPad and Skype to call home from my hotel (which had free WiFi) and places like Subway (the sandwich chain has invaded the UK), which offered free WiFi. I have made sure for my own upcoming trip that all of the hotels/B&Bs we will be staying in offer free WiFi.

I traveled to Germany, London, France and Italy few months ago. I used what the call the Internet Cafes. It's normally a hole on the wall with multiple phone cabins and also computers. Its relatively cheap and secure. They are every where.
Have fun