A goal for SIP was to provide a superset of the call processing functions and features present in the public switched telephone network (PSTN). As such, features that permit familiar telephone-like operations are present: dialing a number, causing a phone to ring, hearing ringback tones or a busy signal. Implementation and terminology are different; for example, SIP refers to a device being in an "alerting state" rather than "ringing."
SIP also implements many of the more advanced call processing features present in Signalling System 7 (SS7), though the two protocols themselves could hardly be more different.
Devices with the look, feel, and shape of a traditional telephone, but that use SIP and RTP for communications, are commercially available from several vendors. Some of these can use Enum to translate existing phone numbers to SIP addresses using DNS, so calls to other SIP users can bypass the telephone network, even though your service provider might normally act as a gateway to the PSTN network for traditional phone numbers (and charge you for it).
SIP uses the Session Description Protocol (SDP) to describe the media content of the session, e.g. what IP ports to use, the codec being used etc. In typical use, SIP "sessions" are simply packet streams of the Real Time Transport Protocol (RTP).
The first standard version (SIP 2.0) was defined in RFC 2543. The protocol was further clarified in RFC 3261, although many implementations are still using interim draft versions. Note that the version number remains 2.0.
Microsoft Windows Messenger uses SIP, implementing a SIP User Agent (end device). So are various softswitch implementations, e.g. by Nortel, Sonus and many more. Such devices are normally acting as a SIP proxy. Also, SIP requires firewalls to have knowledge about the SIP protocol in order to give the needed security. Many firewalls now incorporate SIP functionality, especially Cisco's, yet many do not, and it is relatively difficult to establish good SIP links between firewalls from different vendors. It is possible to add SIP capabilities to firewalls with thrid-party products.