Skype works very well here, I use it every day.
As far as Broadband, yes it is expensive. I pay 40 euros a month for 2mbs. Although there is a limit on downloads, I've never gone over the limit, and we have 3 computers hooked up to wi-fi, including a teenage boy who loves his MP3's (say no more )
Well 40 euros per month is expensive, but not as bad as I had feared.
I'm trying to see whether I could use an internet connection in Portugal for work purposes - basically running a fat email client (like Outlook instead of using webmail), and relying on Skype as my primary voice communications.
With an unlimited broadband connection here since ... oh, 1999 or so, I hadn't considered the bandwidth usage aspect of this plan.
Simon - what about the "international" internet charges - do you get them for using Skype? Or do you use a provider that doesn't discriminate, or do you have a separate limit for international that you still haven't gone over even using Skype?