I have been using the service since Oct 2008 ... it works nicely. There are no additional fees and renewing for 5 years is $60.
The catch is: to be able to receive calls, you must either a) leave your computer on 24/7 or b) forward your calls to another number via the magicJack control panel.
I didn't want to leave my computer on 24/7, so I purchased a thin client (a computer running Windows XPe that only uses about 9 watts of electricity). They are about $90.
The only issue we have had, when my wife uses the service with the speakerphone portion of our Panasonic handset, the party on the other end hears a tone occasionally. It is called DTMF talk-off and can be rather annoying.
Other than that, for an initial $39.95 investment and $19.95 per year after that, it is a great deal.