"Out of band" sends the DTMF tones as separate RTP events and they are not part of the audio stream. Setting to INBAND doesn't work with many IVR systems. I wonder if Voipo does some kind of proxy'ing/conversion when setting it to INBAND for some users. By default Voipo sets it to "Auto" which means it will select the DTMF method depending on the initial negotiation.

I personally have problems with my Google Voice number that automatically starts recording the call (thinking that somebody pressed the "4" key) in the middle. Some say setting it to "INBAND" fixes the problem but for me that causes problems with IVR systems.