Can you please suggest me the best way to record interviews for podcasting?

 I think - you should try and go as directly as possible from the telephone line to your recorder (whatever that may be) and eliminate the acoustic world as much as possible. Sticking a microphone at a speaker phone is a quick fix, but won't help you at all if someone opens a door, another phone line rings, or some other unwanted interruption gets in there.

As far as quality - a phone line is a phone line, and it will always sound like that. We in the biz go with real-time ISDN lines with a codec at either end - the upside is high-quality audio in real time, the downside is expense. For podcasts, though, folks generally understand when someone is calling in on a phone interview that it'll likely sound like a telephone.

If this is a recurring need for you, definitely go with the JK Audio unit, or even any number of telephone interfaces made by a company called Comrex. Also, scan eBay for units made by a company called Gentner - their IP has been bought up by Comrex, but the units themselves go forever - they're the radio station standard.

If quality is a concern, one option is grabbing a digital field recorder which can record directly to MP3.

The great thing about these field recprders is they are slightly bigger than an iPod, which means you can take them anywhere your interviews will take place, and of course the very good sound quality that comes with them. Both of the ones I'm linking to below come with stereo microphones, which are really great at capturing sonic reality. I just got the Edirol R-09 myself and am amazed at the quality.