Here in Durham, British Telecom (BT) is just about the only landline company available, and the basic cost is about £10/month.  It’s fairly easy to set up, but they’ll want a £50 deposit for new international customers (see more details here).

Local rate/National Rate vs Mobiles(Assuming BT plan 1)
Like in the US, the UK has what are equivalent to area codes. The one for Durham is 0191. Since mobiles are on a different numbering system, the (landline) area codes here cover much larger areas. For instance, I think the 0191 covers most of Newcastle, too.
This totally depends on your phone company and plan, but a typical local rate call costs about 4p/min (6am-6pm) and 1.5p/min (nights) and weekends now appear to be free (see here). Apparently, National Rate (i.e., long distance) calls are the same as local rate. Mobile calls have different costs to each providor (TMobile, Orange, etc.) and by Day-Night-Weekend. A rough average is 15 – 12 – 6 p/min (D-N-W).  Here’s a rate summary.

Instead of you making the equivalent of a long distance call, most national companies provide a 0845 number for you to call, which gets charged at local rate prices.  This can be an issue if the company keeps screwing things up (a la British Gas) and you have to call them repeatedly. This costs you not only time but also money.  Other companies have 0870  (or National Rate) numbers which can cost up to 10p/min.  Very few offer 0800 (toll-free) numbers to call.

It only costs to make calls, not to recieve them. The calling costs vary widely depending on plans and operators. We’ve found T-Mobile’s ‘mate’s rates’ to call in-network to be very cheap for a pay-as-you-go plan; however, most in-network minutes are not discounted nearly as much with plans here as they are in the US–it seems that most don’t discount at all. Most mobile numbers seem to start with 07xx xxx xxxx or above.

Calling from the US: for a Durham number of 0191 384 9999, you would dial: 011 44 191 384 9999.
Calling from the UK: for a US number of 972-387-9999, you would dial 00 1 972-387-9999.

We’re big fans of Vonagefor calling between the UK and England though I don’t think it works on the University network (i.e., in Keenan House). Buy a Vonage router in the US and you’ll essentially have a US phone here in the UK, so you use a regular handset (which you can get here in the UK) and have unlimited calls to US (+60 other countries) if you have the World plan like we do. I’m always happy to do an official referral because we both get discounts if you go that way. Skype is also very popular here, and it works on campus.