How do I connect an Arduino to a landline?
Here is a project that someone did a while ago that seems similar:

http://brohogan.blogspot.com/2009/12/telephone-interface-updated-123009.html

He details the DTMF chips he used and gives a sample sketch and schematic. But he also brings up some potential legal issues.

I think given the legal issues and the interface issues (synthetic voice, Morse code, etc.) I would go with a cellular interface and use text messaging to talk to the system. In which case Sparkfun has a bunch of stuff to do just that including an Arduino shield that accepts a SIM card.

http://www.sparkfun.com/products/9607

I'm in the planning stages for a cellular project and this shield seems like a really nice solution for prototyping. And they offer the standalone module as well.