It's done on the Skype app either on the computer or on a tablet or a smart phone.
The attached screen shows the menu after a phone number or contact is entered. Tap on the SMS line and you get another screen where you can enter a message.
I've talked to a cousin while he was away on business in Vietnam and talk to my daughter in Japan regularly and find the sound is quite good. The video is neat too... I use my galaxy tab usually but have also used my phone (a Galaxy Ace) for voice/SMS, not video since no front camera.
As far as local numbers, you can use what they call "Skype to Go" numbers which are local numbers you can assign to your most frequently used contacts.
Last edited by Cdesja5; 09-13-2012 at 08:59 PM.