Remember kids... always wear a helmet. (The almighty bikeradar helmet thread)

Handsfree is cheap, but ineffective. The greater problem with phoning while driving is not the physical act of holding the handset, but the mental distraction of trying to hold a conversation with a distant party.

my work just gave us the 'company driving policy' involving the usual statistics etc, then told us we can't use any phones, including hands free when driving for work. Fair enough I thought, but what about sat navs? No, that's ok we think. Eating a sandwich? er, that's not covered either. I guess the phone is the only thing they would be blamed for in an accident, sigh.

As mdcc_tester says, it's the conversation that's a distraction. I've witnessed a few drivers obviously having a very heated hands free conversation including one who was hitting the stearing wheel, presumably in frustration.
Eating a sandwich is less of a distraction (unless it's a grated cheese one and it's mostly falling all over your lap).