I have been a little rough on the concept of pay per call in the past. Why? Well, costs are high now and I like to think of myself as an advocate of the little guy. Essentially, there are cheaper outlets to obtain new business but it does allow those with a limited or non-existent web presence access to an enormous audience. I still believe that there is the possibility of fraud but they say it is less of an issue than pay per click fraud - which I believe. Corporate sabotage is another issue entirely (I keep having nightmares of people calling and tying up the business lines).
Personally, I think it was a mistake to market the product to the wider Web community as opposed to the more high-end audience that it actually caters to - at least at this point in time. But the wider net that was cast certainly caught the attention of most online marketers. It looks attractive to those that can spend a little more for a lead (lawyers, doctors, etc. - which I have never looked online for, but I digress).
There are several pay-per-call providers but Ingenio seems to be leading the pack at the moment. There are too many variations of the concept to explain it in a simple way but as people search online they are presented with your advertisement or search listing (which includes a toll-free phone number) and calls are tracked so that you can be charged. The ad model is truly in its infancy but with the ability to target service areas and specific business categories (especially highly competitive markets on a local level) it certainly has a future. I am starting to see the value if you are a call center or sell a high-end product. You can learn more at Ingenio.com which currently works with AOL - a nice relationship which could certainly pay big dividends if applied correctly.