The calls are still placed through the iPhone's native dialer, but a local Google number is called first. This allows Google to keep the costs low. Google Voice is free with the exception of International calls which they offer at a super low price.
Google Skirts iPhone Voice App Rejection with New Web App
Now, Google Voice is getting the same treatment with a brand spankin' new web app. The app was developed for HTML5 compatible devices - which includes the iPhone as well as Palm's platform.
