We've been talking about that for about a week and it's finally here! Skype has updated their iOS appp to include video chatting feature. It works over Wi-Fi and 3G to another iPhone or to a Skype desktop user.
What's New in Version 3.0Download Skype for iOS [iTunes Link]
- Make Skype to Skype video calls on WiFi and 3G*
- Call Skype desktop users (Mac OS X or Windows) and other iPhone users.
- Two-way video calls supported on iPhone 4, iPhone 3GS and iPod touch 4th gen.
- Receive only video supported on iPad and iPod touch 3rd gen, with no camera.
- Make video calls in portrait and landscape.
- Skype video calling requires iOS 4.0 or above.