Well, its been a month and I took a different tacked with this project. I have used 12 relays to dial the numbers and pick up / hang up the phone. However, I am going to look at it differently, and wire up two microphones and get the arduino board to switch the "Dial tone" and the "Voice" mics about when I am dialling the phone number. I wonder why I didn't think of this before.....
Thanks for all your help people and I do appreciate it. I learned quite a bit, but do expect me to be back with more dumb questions at some point! 