Another thing with skype ... it can be like having a second phone line in the house.  I can call and talk without tying up the regular house phone.  Call quality is usually good.  I think it is like $36 per year to make unlimited calls (within terms of service).  So, if you are a business and plan to be on the phone 8 hours a day 5 days a week, this is considered unreasonable.  But if you make typical residential calls to family and friends and talk for a few hours at a time several times a week, that's considered reasonable.  They have full terms on the site.

Too bad I don't have contacts all over the country/world. I would really get a kick out of this.

Desktop (with cam) in one room. Take laptop (with cam) to other room. Let the kids Skype to each other. Hilarity ensues. Being all over the world isn't a requirement. (That does require two different Skype user names.)

Been using Skype for years. Thoroughly recommend it. Ok, sometimes the video and sound quality can be a bit dodgy. But it's free and fun to use.

And for anyone with an iPhone, I would also recommending installing the Skype app, too. Not so good, when you are in a 3G only area, but excellent when you are connected via WiFi.