What are the advantages and disadvantages of using VoIP technology over circuit switch?

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VoIP can use existing Internet connections for telephony. However, since you asked about rural areas, broadband services are not available to all rural areas. While the bandwidth necessary for a single conversation is small (depending on the compression used), I would not want to use it over a dial-up connection, which may be the case in many rural areas.

I have heard some IP voice calls over frame-relay and dial-up and it reminds you more of a walkie-talkie conversation than a phone conversation. That said, if broadband is available, it may be an option. In order to place a call to a non-IP phone, there would need to be a gateway to the PSTN (Public Switched Telephone Network). The gateway basically takes the packetized voice conversation and places it onto a circuit switched network after reassembly so that the telephone on the other end can hear it and vice-versa on the receive end. This gateway could be at the central office or it could be at the customer premise.

As for which one is desirable, that really depends on services available. Latency, Jitter and Loss are all issues with voice traffic (Note: Jitter in voice conversations refers to variations in packet delay causing the packets to be received out of sequence.) Latency is time lost on the wire and can cause undesirable affects especially if it is so long that it times out. Loss refers to dropped packets and for obvious reasons, you would not want high losses. If you are thinking of setting up a rural branch to a home office and the Internet connection is there, the rural office can use the gateway services and PBX at the main office site.

Similarly, if you have an office with an IP-PBX, you could supply VoIP services to any rural customer that you wish to allow to be on your system with enough bandwidth to make it viable.