I think the magic in MagicJack is that they think they can stay afloat on $20 per year VoIP. FierceVoIP has an article about MagicJack, a VoIP USB appliance that costs $40 for year 1 and $20 for year 2. They are now selling 7K devices per day! And this week was news week for MJ. It seemed everyone was writing about them including telephony and channel 16.
It will probably be a hit with the Skype folks and the Vonage-SunRocket target crowd, but at $20 per year, it probably won't be around long.
I think MJ will hasten the demise of Vonage actually. We'll see.