I have been using the Ooma Hub for almost a year, and I recently purchased a magic Jack for testing and for use when traveling. This page discussed the differences between them, focusing on the situations for which one might be better than the other. See the following pages for detailed reviews of the Ooma and Magicjack products:
Cost
On the cost metric, Magic Jack wins hands down. You can likely pick up a magic jack for around $40, whereas the Ooma Hub, or Ooma Telo will cost around $200 or $250 respectively. Both include service for the first year. For Magic Jack, additional years of service cost $20 at present, though they are offering a 5 year package for $60, brining the cost per added year down to $12. The Ooma hub was originally marketed as free service for the life of the device, and those orgininal purchasers have been grandfathered into this pricing structure. For the Ooma Telo (and possibly also for future purchasers of the hub), the cost per added year is $12 which primarily covers taxes they have to collect on the phone service and 911 fees.
Features
Both the Magic Jack and Ooma provide similar features including free outgoing calls within the US, voice mail, caller-id, etc. (There is a question regarding whether voice mail is included in the basic plan for the Ooma Telo or new Ooma Hubs, Ooma initially announced that it is not, but I have seen postings that it now is included and the current product description would seem to support this - I have an early Ooma Core system, which does include voicemail). Ooma offers an extra package of services called 'premier' for $10 per month which includes a second phone number - you get two phone numbers - enhanced voicemail, instant second phone line (you can make two calls simultaneously) and simultaneous ring (meaning that you can designate another phone such as a cell phome that will ring simultaneouslywith your Ooma phone and you can anser the call on either).
Reliabiltiy, Performance, and Convenience
Ooma wins on these aspects. Both Magic Jack and Ooma are dependent on the reliability of your internet service, but Magic Jack also depends on the reliability of the computer to which it is connected. This means that you would not have phone service with Magic Jack when your computer is rebooting, or if you turn it off at night. Additionally, the quality of the call may be affected with Magic Jack when others are using your computer. This may ot be as much an issue if you are the only person in your home, but if your desktop or laptop if being used to also support Magic Jack calls by other members of your family while you are playing games or working on your computer, it can be an issue. Finally, there is the convenience factor: Once you set up the Ooma Hub or Telo, then as long as the network is up, you have phone service from all the handsets connected. For Magic Jack, you need to turn on your computer (if it isn't already on) and if you are using a mobile laptop, it means that when you get home, you have to set up your laptop, start Magic Jack, etc, before you can make ore receive calls.
What they are best for
As a phone to use when traveling, the Magic Jack is probably most
appropriate between the two. For use as a primary phone at home, the
Ooma core or Ooma Telo are most aprpriate for convenience,
performance, and reliability resons, but your up-front cost will be
significantly higher.