How does a foreign business (in my case - a business located in India)
set up a toll free number (1-800 /1-866 etc) in North America. The
calls will need to be routed to India.
A comparison of the different service providers out there would be
very much appreciated.

Thanks in advance.

Hello there, 

I personally use www.ureach.com, but if you have a lot of people who
need their own extension then http://www.tollfreelive.com is also
good.

If you have a broadband connection, you can use
Vonage...http://www.vonage.com/features.php?feature=toll_free.  For
US$4.99 per month (on top of the monthly fee for the Vonage service
which starts around US$30/mo) you can have an inbound toll free number
and it will reach you anywhere in the world that you have broadband
access.  If you aren't available to take the call it has voice mail. 
I have not personally used this but just read about it last night and
am planning to set it up as I live in Australia and I do a lot of
business in the USA.

The answer is VOIP. You must have a broadband connection but you can
set up a telephone number in the US without any problem. You need to
check to see who provides the best VoIP service in your area. Vonage
as previously mentioned but there are several other Voip providers
that may better meet your needs. This site offers several options and
you can compare rates and services. They also have information on the
traditional phone options.

http://www.telebay.com/solidgold

You might look at Skype.. simple sign up for their skype-in service,
and you get a US / UK Phone No. for 30 Euro a YEAR (Yes !! it is a
year)

The calls come to your computer, and the voice is great.. no recurring
charges.. the service simply works :)

Follow this link to the site... http://www.6URL.com/QJA