Asterisk is a complete PBX in software. It provides all of the features you would expect from a PBX and more. Asterisk does voice over IP in three protocols, and can interoperate with almost all standards-based telephony equipment using relatively inexpensive hardware.
Asterisk provides Voicemail services with Directory, Call Conferencing, Interactive Voice Response, Call Queuing. It has support for three-way calling, caller ID services, ADSI, SIP and H.323 (as both client and gateway). Check the features section on the official Asterisk web site for a more complete list.
Asterisk is released as open source software under the General Public License (GPL) version 2.