Those lucky enough to have an iPhone 4 or 3GS, or 4th generation iPod touch, will be able to make two-way video calls with any other Skype user, including desktop and laptop PC users, and presumably other mobile Skype users on Android or BlackBerry.
This software update also affects the iPad and third-generation iPod touch, but they can only receive video, rather than send it.
The big news, of course, is that Skype is allowing video calls over 3G. It remains to be seen what the mobile operator's response will be, once people start making use of free, high-bandwidth video-to-video calls. We always figured that the Wi-Fi-only restriction of FaceTime was enforced by mobile operators, rather than Apple!
Gallery: Skype 3.0 for iPhone