Is Asterisk right for us?

I would like some information on the Digium/Asterisk products and solutions.

We have a list of feature requirements for our phone system we wish to
implement, and the feature list of Asterisk seems to do it all. However,
the hardware part is where we would like more information.

Basically, we have 8 lines and 10 extensions coming over standard phone
lines (and possibly a T1 line split for voice and data).

How would this hardware and software replace our existing hardware system?

I am fluent with Linux, but never played with Asterisk. I assume I would have to build a Linux server with Asterisk, and have some Digium hardware, but what hardware do I need?

You could go with 2 TDM400Ps for your standard phone lines. Or you could do a fractional t1 and break of 8 of the channels for voice using a TE110P. I would to with the TE110P since it allows you to scale, depending upon the availability of the T1 and/or budget.

Thanks.

How do the individual phones connect to everything though?

I am kind of confused, but if pointed in the right direction I can go from there.

IF you go with the channell bank you can connect the analog phones to it. If you are using voip phones then they would connect through your local area network.

I use adtran 750 channel banks in my setup see here
adtran.com
go to the prducts page and choose the Total Access 750. I got mine used of of ebay a lot cheaper then new
the channel bank connects to a punchdown block then the phone wiring connects to the punch down block.

The TDM400Ps have connector on them just like a standard phone jack has that you plug your lines into.