Phone ATA and VOIP
A phone ATA is a device that lets you plug a regular old phone line into a router so that you can make calls using your internet connection. One end contains an ethernet (RJ-45) port, and the other contains at least one phone jack (RJ-11). The term simply stands for "analog telephone adapter."
The point of all this is to take advantage of VOIP (voice over IP). VOIP offers tremendous cost savings over traditional service from your carrier, and it's generally also less expensive than buying it from your cable company (for people with cable modems). A phone ATA might cost you $70, but give you unlimited calls for $20 per year. That's much cheaper than your phone company will give you, and still much cheaper than your cable company's voice solution.
The disadvantage of using an ATA with VOIP is that you are in effect piggybacking on your internet connection. If your internet connection is not functioning (e.g. power outage), then your phone is not either. And if your connection slows down or is marginalized by heavy downloading, then your VOIP provider may drop the call or provide you with weak sound quality.
It used to be the case that you also had to give up your current phone number, but most reputable services now allow you to do that. Generally, it's for a one-time $10-$40 fee. Of course, this is only possible if your provider supports your area code and exchange.
Vonage and MagicJack are two popular VOIP services that are used with a phone ATA. Some MagicJack models eschew the RJ-45 port for a USB port (i.e. they require a computer to be on), but the concept is the same.