We did UK & bits of Europe in 2009.
In the UK where we spent the most time, we bought a prepaid UK phone (Orange) to use to call family in UK and usual local travel calls - taxi, motel bookings etc.
Can't remember now what EU countries it worked in, but it was on roaming so a little more expensive.
Calling back home we used pre-paid calling cards or Skype via wifi (sometimes free, sometimes not) .