The phone should work just like a normal one. You you be able to speak, and hear through it. Mine shows no lights or anything when not in use, but lights up when a call comes in, as well as ringing. There should not be any need to change any of your settings. Mine took about two mins to set up.
You do need to purchase some credit from the Sykpe web site if you are going call a non skype phone, But all Skype to Sykpe are free.