Given that I was looking for a working Localphone.com setup for N900 and it required a few bits of hit and trial to get it working, I thought I would post the instructions here in the hope that google will index it so that anyone looking for the setup will be pointed to this thread.

For those of you who don't know what localphone.com is, it is a VOIP provider in UK, well known for its good quality service calls and rates much lower than those offered on skypeout for many countries. Usually I just use their local numbers to make calls but since I was going to be out of the country and had free wifi in my hotel, I decided to configure my n900 to work with localphone.

So the step by step instructions are:

1. Under settings, go to VOIP and IM accounts
2. Select New to create a new account
3. In the address field, enter YourSipId@localphone.com (e.g. 2347654@localphone.com). Make sure you don't use sip:2347654 or sip.2347654
4. Under password, enter your SIP password. Both SIP ID and password are available under Localphone voip settings in your account. You may need to enable VOIP in order to use it though.
5. Check the enabled box
6. Under advanced settings, enter your SIP Id as user name(as in step 3) but minus the @localphone.com
7. Select Use for telephone numbers so that it gives you the option to call your contacts using SIP
8. Transport is Auto
9. Outbound proxy is proxy.localphone.com
10. Port is 5060
11. Leave all other options on default and click Done
12. Before you can make any call, you would need to go online (this is the same way you go online on skype or gtalk, under availability)
13. Select any contact and click on SIP Audio option OR in the dial pad, instead of call type being Cellular, select the SIP account

That's it, you should be up and running on Localphone.com