I've been on both the "giving" and "receiving" side of phone interviews (sometimes both in the same week!). I remain unconvinced that phone interviews are useful. The skills necessary for doing well on a phone interview just don't seem to translate into the skills necessary to be an excellent professor.
Phone interviews tell you the following things:
1) can the candidate make a personal connection with someone over the phone, without visual cues, and under massive pressure where the slightest misstep could leave them living in their mother-in-law's basement next year.
2) can the candidate speak clearly and coherently under the aforementioned circumstances, with potentially severe penalties to anyone who speaks with an accent, has a speaking impediment, or just mumbles when nervous.
3) can the candidate speak off-the-cuff on complex subjects, with no warning, and just happen to hit the one piece of information you, the interviewer, were most interested in hearing.
The phone interview process is advantageous to out-going, confident candidates with less at stake should the interview fail. Out-going and confident describes precisely zero of the graduate students I've known at the end of a grueling PhD program. Yet, many of those students are highly empathetic toward their students, committed to both research and teaching, and extremely collegial.
More problematic, phone interviews put international candidates and candidates with disabilities at a disadvantage, even when their accent or speech impediment would have little or no effect on the classroom; for example, if it's only problematic when you can't see the person talk so you're not getting visual cues, or when normal static on the phone line makes it hard to understand them.
I am sympathetic to the idea that asking candidates to speak off-the-cuff tells you something about how well they respond to student questions. That does seem to be the only real justification for phone interviews. But most of the questions I've been asked (or have asked) during phone interviews are not good substitutes for the questions students ask during class. Student questions usually come out of the material discussed, they don't drop in out of the blue and cover any topic related to one's profession. They also come from people with whom you've had time to develop some rapport, and whose relationship to yourself is well defined and whose whims are not able to derail your future career. This has a profound effect on how comfortable candidates are in answering the questions.
Furthermore, if a student asks you a question you can't answer, it is both the ethical and educational to say "I don't know", and then look it up (preferably with the student). I still remember the student who asked me how tarsiers were able to turn their necks so far. I had no idea, but we did some looking on-line until we found drawings of their cervical vertebrae and compared those to other primates. Education happened, for both of us! In a phone interview, saying "I don't know", or "I'll have to look that up", would be a kiss of death.
Finally, in a phone interview, the content of the candidate's answers must be taken with a grain of salt. Their answers are merely what they could think to say when blindsided by a particular question and told they had some vague or unknown time limit in which to answer it. And, yet, search committees tend to treat their answers as complete. Candidates may be eliminated because they didn't mention running a fieldschool when asked what classes they would like to teach. Yet, had they been asked specifically if they were willing to run a fieldschool, they may have enthusiastically detailed their plans to do just that.
Sometimes universities mandate phone interviews (I think ours might), and many faculty members really like them. I'll admit, they make it easy to whittle down a list of otherwise equally-well qualified candidates because the outcomes of phone interviews tend to be radically different. I'm just not sure we're whittling the candidates down on the right basis.
The best "phone interview" I ever had was an e-mail. I was given five questions and asked to write a paragraph answer for each. I didn't get a campus visit, but at least I felt my true voice had been heard. If search committees actually care about complete and comparable answers to their questions, I'd say that's the way to go. It's easier on everyone's schedule, and more honest than the phone interview.