Assuming you are concerned about the code you run, the location you run it in, etc. Does not provide encryption to my knowledge, but VPN can solve that.
If you are looking for something more robust that can interconnect with telecom stuff, I'd suggest http://www.freeswitch.org/ or http://www.asterisk.org/
Free SIP services are another option, but not easy enough for the novice who is in a hurry and just want things to work. Most people seem to use SIP servers operated by companies, not running the servers themselves. Some ISP's are selling pre-packed VOIP service (and some are deep inspecting every packet, lol).
Skype has the market now. It is ubiquitous. It's easy to use and works reasonably well.
But to think Skype will become the world's new default global communications channel, with MS in control, is just silly.
Skype is just a hint of what's possible, given today's bandwidth and a network that no one player controls.