Ok, now I'm not sure if I was hearing things. I'm kimda thinking that I was. I noticed that with the echo cancellation on and the system volume on with only 1 or 2 bars of volume it sounds like it's coming from the earpiece when I hold it like a normal phone. I'm thinking this is what must have happened although I was sure the system volume was right up when I had it happen the first time. Probably just chasing dreams though.
The people I've called since yesterday using the method of having the system volume only up 1 or 2 notches all said it sounded fine and that there wasn't an echo... and it does sound like it's coming from the earpiece.
I'll have to check out nimbuzz. I thought I'd heard that the voice quality wasn't as good as using the skype client though. Maybe I'll have to try it for myself and be my own judge.