Motorola has done it! They've come out with a cell phone that can operate over a Wi-Fi network and then seamlessly switch to a GSM cell network when you move away from the hot spot.
The FCC today approved the Motorola CN620, the first phone capable of operating on both mobile and Wi-Fi networks. Although the phone was developed by Motorola's iDEN group, the phone supports only GSM and Wi-Fi networks. Voice calls started on Wi-Fi networks can be handed off to a GSM network. The reverse is possible only for certain types of calls. Features of the phone include a large color main display, an external display, speakerphone, eight-way navigation, and PTT (push-to-talk). Although the prototype approved by the FCC operates only on GSM networks, FCC documents reveal that the final model will support all three major types of Wi-Fi (802.11b, 802.11g, and 802.11a), as well as quad-band GSM. See: http://www.phonescoop.com/news/item.php?n=902
Speaking of Wi-Fi, today was my monthly conversation on WKAR-FM during Morning Edition. Scott Pohl and I talked about ... Wi-Fi! You can
listen to our conversation online.