GrandCentral does, indeed, convert an incoming call (from the caller to your GC number) into an outgoing call (from GC to your cell phone, landline, or wherever you point your GC number to). And its business model is predicated on charging for this service, which, in a somewhat round-about way, is the same as charging for termination (a-la-Vonage, etc.).

GC gives away 100 minutes of such connections. Use that up and you can buy “a bucket” of 400 minutes for $9.99, or unlimited minutes for $14.99 per month, which may be a bit pricey for something that is being pitched primarily as a convenience.

Ultimately, a CPE-based solution, as you write, may be preferable (though calls routed through a hardware device to a cell phone number would also, necessarily, convert an incoming call to outgoing). There are a couple of devices on the market that can offer some of the functionality of GC (specifically a device that includes some kind of call gateway, like the Linksys SPA3XXX series), but these have no way of acting as a voice mail central depot, like CG offers.

A hardware PBX (such as Asterisk and, to a greater extent in that it integrates email and messaging, Communigate Pro ) can emulate more of CG’s functionality, but most definitely not its ease of use, accessibility and eye-catching appeal.

Perhaps the hardware solution will come in the form of low-cost PBX appliances, which I do believe are coming soon but will take a while before they gain anything approaching critical mass.

Will CG’s business model have to change over time as hardware solutions materialize? Of that I have no doubt. For now, CG’s solution is the best I’ve seen.

Regarding the extra phone number, AIM PhoneLine also issues a new phone number. I guess, the trick is to round up a beloved partner (you know what I mean).